COVID-19 negatively impacts Q1 alcohol and dairy sales in China
3 Apr 2020Euromonitor 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.

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 news

Gen Z consumers are thirsty for variety in beverages
31 May 2022
As Gen Z consumers gain disposable income, they are looking to quench their thirst with beverage brands that are clean, sustainable and socially responsible, according to a report from the global consumer trend forecaster WGSN.
Read more
Tea flavour innovation in China unites tradition with modernity
13 Apr 2022
Chinese tea brands are innovating with new flavours, blends and formats, and even making a foray into food with tea-flavoured food and drink launches.
Read more
Low- and no-alcohol beverages see significant growth globally
11 Apr 2022
Alcohol-free and low-alcohol beverages are helping drive growth for many alcohol manufacturers that have been struggling to adapt to the changing tastes of the market in recent years.
Read more
Baby formula brands innovate with clean label launches
7 Apr 2022
Clean label baby food is receiving a significant amount of development, with two recent brands ByHeart and Bobbi launching formulations certified by the Clean Label Project with a Purity Award.
Read more
Consumers seek ashwagandha-fueled relaxation in beverages
28 Mar 2022
Ashwagandha has been used in India for centuries, and it is only in recent years that consumers in the US and now Europe are realising its health benefits, with manufacturers starting to add this adaptogen to beverage formulations.
Read more
A new brew: Ayurvedic coffee in India, adaptogenic coffee from Finland
10 Mar 2022
Coffee is probably one of the world’s most popular functional beverages, providing millions with their daily caffeine hit. However, some brands are taking its functional benefits further by adding in botanicals, vitamins, and other nutrients.
Read more
Coca-Cola is spreading itself outside beverages to expand its market
28 Feb 2022
With 130 years of experience behind the brand Coca-Cola, it would be easy to imagine that the brand would be comfortably reliant on one of its 15 billion-dollar brands that make up the portfolio of one of the largest beverage companies in the world.
Read more
Microdrink startup Waterdrop expands in US, looks to move global
24 Feb 2022
Australian beverage startup Waterdrop has raised €60 million ($70 million) in a Series B funding round led by Singapore-based investment firm Temasek. The startup, which makes microdrinks — water-soluble, sugar-free cubes packed with plant-b...
Read more
Synthesising volatile aroma compounds to make alcohol-free beer taste better
18 Feb 2022
A Danish startup is using synthetic biology to produce the volatile aroma compounds that are lost when brewers make low- and no-alcohol beer.
Read more
Can sugar-reducing tech revive falling fruit juice sales?
12 Feb 2022
Better Juice’s naturally sugar-reduced fruit juice will hit US supermarket shelves in spring 2022 thanks to a partnership with GEA. Could this turn around the long-term decline in fruit juice sales?
Read moreAre you a supplier?
Here's what we can do for you
- Generate quality leads for your business
- Stay visible for 365 days of the year
- Receive product inquiries and respond to meeting requests directly
- Improve company online presence through Search Engine Optimisation