Beer Quarterly Q4 2020: Can Beer Consumption Recover After Lockdowns?

Across the globe, the beer sector suffered from the Covid-19 pandemic in the early stages of 2020. In some countries, alcohol consumption was restricted (South Africa), while others classified brewing as a non-essential activity and ceased beer production (Mexico). “In most countries, consumers faced a lockdown and the on-premise channel was closed, creating varying degrees of pain for nearly all brewers. As we approach November, we are still not out of the woods,” according to Francois Sonneville, Senior Analyst – Beverages.

Report summary

In our first quarterly update on the beer industry, we take a look at how Covid-19 has impacted brewers in different regions, and what we expect to see moving forward.

• North America – The overall market has held up relatively well, helped by its reliance on off-trade sales and stellar e-commerce growth. Brewers large and small have proved surprisingly nimble and adaptable – which may lead to notable changes to the on-premise moving forward. Craft brewers, who are more dependent on the on-trade, have so far avoided closures, though we are wary of the impact of winter on those dependent on outdoor seating.

• Europe – On-trade markets have been hit hard, especially in tourist areas, and beer going stale in kegs has caused additional problems. As new Covid cases are on the rise and the risk of a second lockdown increases, chain integration might help to lower costs.

• Asia – Despite a sharp recovery in China, the loss of summer sales will hang over 2020 Asian beer volumes. China comprises 70% of total Asian beer consumption, and thus, is critical to recovery. We have seen smart recoveries in Thailand and Japan in Q3 2020 but mixed fortunes in the rest of Asia, specifically, India, the Philippines, and Vietnam.