With the approach of the New Year, it is time to recap some of the industry’s major developments in 2021. When compared with 2020, the year 2021 was much more resilient.
The Director and GM of the IMENA region of Brown Forman, Siddharth Wadia, talks about the accelerated growth in premiumization in the Alcobev industry in 2021. He also shares his reasons for his optimism in the long-term outlook. Given below are his thoughts and views.
Major developments in the Alcobev industry in 2021
2021 has been an interesting year for the Alcobev industry. The disruptions induced by the pandemic had a great impact on the industry, impacting the supply chain and bringing about changes in consumption occasions.
However, the latter half of the year saw a strong business recovery. Other than the usually seen ‘V’-shaped recovery, the most encouraging aspect was the accelerated growth in premiumization.
Besides that, there was an increase in ‘in-home’ consumption, improvement of home delivery and retail infrastructure, increasing consumer needs to experience new categories, and increased consumers using digital mediums.
Key Challenges
Short-term challenges were few during the year, like restrictions around social gatherings and celebratory occasions. While the restrictions were necessary, the Alcobev sector is being cautiously optimistic of normalcy being returned.
The global supply chain will have to bear the brunt of the mid-term impact, given the unavailability of shipping vessels and a global rebalancing of demand with respect to supply.
The organization must stay agile. Otherwise, they wouldn’t be able to respond to the disruptions quickly and effectively. They need to re-calibrate their approach while trying to build a sustainable and scalable business.
Outlook for 2022
An important factor that will help in stabilizing the new normal is the increased coverage of vaccinations and the improved vaccine availability. Trends show improving customer confidence and a robust premiumization for the Alcobev sector, so there is no reason but to be optimistic on the long-term outlook.
Below are some good reasons for this optimism:
- The continuation of the on-premises recovery
- Upbeat domestic tourism
- Improved customer repertoire directed at low alcoholic beverages and flavored whiskeys
- Increased consumer willingness to try premium and quality brands
- Better affordability of premium brands in some key states.
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