COVID-19 negatively impacts Q1 alcohol and dairy sales in China

3 Apr 2020

Euromonitor released a report revealing that both alcohol and dairy sales have suffered as a result of the extended quarantine in many Chinese cities during the first quarter of the year.

Alcohol fared better in the first quarter of 2020 than dairy as consumers stocked up for personal use and partially offset the losses experienced in the restaurant and bar sector. Retail sales of alcohol were buoyed by consumers stocking up before the Spring Festival and during the outbreak. However, Euromonitor noted that closures of bars and restaurants were “severely impacting alcoholic drink sales, ” which accounted for 46.7% of volume sales in China in 2019.

COVID-19 negatively impacts Q1 alcohol and dairy sales in China

Consumers also altered how they purchased alcohol. In 2019, e-commerce accounted for only 8.8% of alcohol sales in China but that sales channel registered significant growth in 2020. Although final growth numbers have yet to be recorded, the Euromonitor report predicted it will be “significant” and “may partially cushion the loss in both on-trade and off-trade channels.”

Spirits and wine represented the majority of the affected sales in the alcohol segment. Negative effects of COVID-19 on beer sales will remain “minimal” due to the first quarter of the year being the traditional off-season for beer. Euromonitor noted that sporting events in the second and third quarters of the year traditionally see enough volume to offset sales losses from the first three months of 2020.

If the epidemic continues, the negative impact on alcohol sales will be amplified and continue a downward trend that has been developing. Already, Euromonitor statistics show that alcoholic drink volume sales in China have been shrinking between 2014 and 2019.

Dairy sales, on the other hand, have been growing with a CAGR of 98% during the same time period. However, COVID-19 stopped this industry growth in its tracks with detrimental ramifications. Much of the growth in dairy was due to the rise of milk tea shops and specialty coffee bars, which have been shuttered for the large part of the first quarter of the year. Although there has been continued strong demand from retail as authorities advise Chinese citizens to consume dairy to boost immunity, it will not be enough to counterbalance the effects of lost foodservice revenue. Euromonitor predicts “the fresh milk sales loss in foodservice during Q1 will be difficult to compensate throughout the year.”

Related categories

Related tags

Beverage Market News

Related news

Unilever to divest most of its tea business but keep RTD Lipton

Unilever to divest most of its tea business but keep RTD Lipton

7 Aug 2020

After a nearly seven-month review of its tea business, Unilever announced that it would divest the majority of its €3 billion ($3.5 billion) tea business, which includes tea brands PG Tips, Pukka Herbs and Tazo that generated €2 billion ($2.3 billion) ...

Read more 
Coca-Cola to launch Topo Chico hard seltzer brand in Latin America

Coca-Cola to launch Topo Chico hard seltzer brand in Latin America

6 Aug 2020

The hard seltzer market has seen phenomenal growth and now Coca-Cola is getting into the space with the launch of Topo Chico Hard Seltzer. Coke announced the alcoholic beverage will be released in select cities in Latin America later this year. In 2021...

Read more 
Chobani releases a functional non-dairy beverage

Chobani releases a functional non-dairy beverage

5 Aug 2020

Chobani released a non-dairy probiotic drink to further its efforts to expand out of animal-based dairy. The functional beverage is made with an oat base, has 80 calories, 11 grams of sugar and is made with organic, non-GMO ingredients.

Read more 
Dairy free segment gets a banana milk

Dairy free segment gets a banana milk

4 Aug 2020

The non-dairy category has exploded in recent years from a category dominated by soy milk to a market with milks made from nuts, grains and plant-based protein sources. Now, the category has a banana milk.

Read more 
Kombucha Brewers International releases code of practice to standardize kombucha

Kombucha Brewers International releases code of practice to standardize kombucha

3 Aug 2020

U.S. kombucha trade association Kombucha Brewers International (KBI) established a code of practice that outlines the quality standards for the production of this fermented beverage. The trade group is also working on releasing a seal for manufacturers...

Read more 
Following second quarter earnings report, Coca-Cola looks to drop more brands

Following second quarter earnings report, Coca-Cola looks to drop more brands

30 Jul 2020

After Coca-Cola announced the discontinuation of its Odwalla juice brand earlier this month, Coke's CEO James Quincey said during the company's second quarter earnings call that more of the CPG giant’s brands will be on the chopping block in the near f...

Read more 
Anheuser-Busch releases Busch Light Apple beer

Anheuser-Busch releases Busch Light Apple beer

24 Jul 2020

It’s not yet fall, but Anheuser-Busch launched an apple-flavored lager under its Busch Light line. This is the first time in 65 years that the Busch Beer brand has released a flavored beer product, and it will be available for a limited time in select ...

Read more 
Analysts report Monster Beverage likely to enter hard seltzer segment

Analysts report Monster Beverage likely to enter hard seltzer segment

21 Jul 2020

Stifel analyst Mark Astrachan released a report stating that he expects energy drink giant Monster Beverage to enter both the hard seltzer space and the non-alcoholic sparkling water category.

Read more 
Kerry ingredients company will debut its Botanicals Collection Zero

Kerry ingredients company will debut its Botanicals Collection Zero

16 Jul 2020

Kerry introduced its new Botanicals Collection Zero, a range of botanical extracts that are specifically designed for low- and no-alcohol beverages. The ingredient company will offer 15 new standard extracts with an additional 35 other options that the...

Read more 
Danone rejects claim that its infant formulas contain toxic substances

Danone rejects claim that its infant formulas contain toxic substances

15 Jul 2020

After industry watchdog group Foodwatch released a report last October that aromatic mineral oils (MOAH) were found in 16 infant formula brands, including Danone’s Gallia Galliagest Lactose-free Growing-up product, the French manufacturing giant recent...

Read more