The global alcohol industry is facing headwinds, with consumption trends showing a continued decline. Even as 2025 is expected to bring some relief, it is unlikely to reverse the negative growth trajectory. Rising disposable incomes and an expanding population of legal-age drinkers have not significantly boosted sales, as younger generations prioritize spending on mindful experiences, such as travel, over traditional indulgences like alcohol.

The State of China's Alcohol Market

China's alcohol market has not been immune to these challenges. Wine and spirits, in particular, struggled in 2024, with much of the year dedicated to clearing out inventory of high-end products like Baijiu and Cognac. Despite hopes for normalization, sales have yet to return to pre-pandemic levels. Notably, even the typically resilient malt Scotch whisky category saw a decline.

However, beer and ready-to-drink beverages (RTDs) bucked the trend, showing gradual growth. Beer, particularly premium and craft varieties, emerged as a popular choice among younger consumers at social gatherings. In 2023, China's beer market accounted for approximately 12% of global sales, maintaining its position as the largest beer-drinking population worldwide.

Yet, domestic beer brands struggled to capitalize on this momentum. Despite growing interest in premium products, craft beers, and no- and low-alcohol options, the bulk of consumer demand shifted toward international brands, driven by a preference for quality and innovation.

Key Demographics and Preferences

To understand the dynamics of China's beer market, it is essential to examine the core demographic trends. The majority of beer consumers fall within the 25-35 age range, predominantly male, and residing in first- or second-tier cities. This demographic is characterized by an affinity for local or craft products that emphasize quality, innovation, and novelty over price. Notably, these consumers are less price-sensitive, prioritizing value and uniqueness over cost.

However, economic uncertainty, employment instability, and rising inflation have curbed overall beer sales. While the decline is less pronounced than in the wine and spirits categories, global beer giants like Carlsberg, Anheuser-Busch InBev, and Budweiser reported notable dips. In the first half of 2024, Carlsberg recorded a 5% drop in sales, while Anheuser-Busch InBev reported an overall beer volume fall of 2.4% year-over-year in Q3 and Budweiser claimed a 3.1% decline in Q4 of the same year.

Economic and Market Trends

The post-pandemic reopening of China's markets in 2023-2024 was anticipated to revive the economy and spur alcohol consumption. Beer sales did see a modest +3% increase during this period. The IWSR projects a compound annual growth rate (CAGR) of +3% for beer sales between 2023 and 2028, driven largely by demand for craft and premium products.

Despite these challenges, the outlook for 2025 is cautiously optimistic. The total beverage alcohol market is poised for recovery, with the on-trade sector (bars and restaurants) showing strong signs of revival as consumers seek novel experiences. While wine and spirits continue to face hurdles, the Chinese beer market is positioned for growth, bolstered by premiumization and the resilience of younger, experience-driven consumers.

The Road Ahead

As China’s beer market evolves, international and domestic players must navigate an increasingly competitive landscape. The focus on quality, innovation, and consumer education will be critical for capturing market share. With economic challenges gradually stabilizing, 2025 presents an opportunity for the beer industry to not only recover but also redefine its role in the broader beverage market.

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