The Beer Market in Singapore is Expected to Increase

Monday 19 August 2013, Amsterdam

Beer sales in Singapore grew by 5% over the previous year. The Singaporean economy has been growing rapidly since 1963 and due to the continued growth; the country has one of the highest per capita in the world. The economy depends heavily on foreign trade - port activities, exports of electronic components and refined oil. Beer will continue to dominate the Singaporean alcoholic drinks sector and is expected to increase by a CAGR of approximately 4% in volume terms between the years 2012 to 2017. The key drivers in this market remain unchanged. Beer sales will be heavily reliant on the tourism industry and influx of foreign workers. Rising expatriate levels and a robust tourism scene spells optimism for this sector.

Beer continues to dominate the Singaporean alcoholic drinks sector

Beer volume sales are forecast to grow at a CAGR of just over 4% between 2012 and 2017. Beer will continue to dominate the Singaporean alcoholic drinks sector. Additionally, beer has a strong correlation with economic growth, as is reflected in the greater demand for more expensive beers. Foreign beer importers are confident that foreign and low quantity, expensive beer will perform well, providing a taste of something different. The category is benefiting from, and should continue to do so, the adventurous Singaporean palate. In 2013 beer importers expect to see generally slower growth, in line with economic growth. Externally-oriented sectors like manufacturing and the wholesale trade saw a decline in quarter on quarter growth in 2012.

Wine and Spirits are also set to see growth

The wine category in Singapore grew by 8% in 2012, boosted by the wealthy population in Singapore which has a keen interest in wine as well as beer. Wine volume sales are expected to grow at a CAGR of nearly 4% between 2012 and 2017. As Singaporean drinkers become more sophisticated, demand for wine has increased considerably over the past few years; with wine cellars and wine boutiques sprouting across the country to cater to this growing demand.

Domestic retailers like NTUC Fairprice and Cold Storage have also jumped on the bandwagon by stocking wines in their stores. The improved distribution of wines is supportive of the increasing demand and sophistication of Singaporeans. In 2012, spirits saw almost 5% growth. Consumers have generally become more sophisticated in their drinking habits and this market has benefited. Spirits volume sales are expected to grow at a CAGR of nearly 3% between 2012 and 2017.

Market outlook

Alcoholic drinks value sales are expected to grow at a CAGR of 8% between 2012 to 2017 to reach SG$1.69 bn in 2017. Beer will continue to dominate the alcoholic drinks sector and is expected to grow at a CAGR of just over 4% between 2012 and 2017. This sector will continue to be heavily reliant on the tourism industry and influx of foreign and expatriate workers.