Alcohol consumption dropped by 6% worldwide and 6.6% in Ireland last year, according to a new report by Drinks Ireland.
This was a direct result of the closure of the hospitality sector for long periods as a result of Covid-19 restrictions, the report states.
Despite the challenges faced by the sector, the report highlights the positive response of many businesses in the industry.
"During these hard times, the drinks industry showed resilience by working together," said Patricia Callan, Director of Drinks Ireland
"This included our distilleries changing over to production of hand sanitizer, our members offering financial and in-kind supports to the hospitality sector and charities, as well as the massive operation to collect and dispose of out-of-date beer and cider in an environmentally sound manner at no cost to the pub sector," she added.
However, the report reveals that the industry continued to be impacted across production, export and sales.
While beer remains Ireland's favourite type of alcohol, its market share fell from 45% in 2019 to 38% in 2020.
According to the report, the closure of the hospitality sector saw beer sales drop by over 17% in Ireland.
Just under 30% of beer sold in 2020 was in hospitality businesses, down from 60% in 2019.
The value of beer exports declined by 17% in 2020, from €305 million to €254 million.
This decrease in total beer sales has resulted in a fall in production by 13% in 2020.
"As the vaccine roll-out continues, the beer sector hopes to be able to see more consumers engaging with the hospitality sector," said Jonathan McDade, Head of Beer at Drinks Ireland.
Meanwhile, the report shows that wine remains the country's second favourite alcohol beverage with its market share increasing to 32%.
Retail wine sales rose by 28% in 2020, which is an increase of 12% on the previous year, due to wine's association with home consumption coupled with the hospitality sector lockdowns.
Like the last five years, Chilean wines remain the nation’s favourite.
As for the variants, the popularity of rosé continues to grow with an estimated 7% share of the wine market, double its share since 2016.
White wine is still the most popular type of wine with a 48% share, with red wine at 45%
The report states that Irish wine drinkers pay the highest rate of excise in the EU at €3.19 per standard bottle of wine.
The excise rate is doubled for sparkling wine.
According to the report, sales of spirits, the country's third favourite category of alcoholic drink, dropped by nearly 5%, while Ireland’s fourth favourite drink, cider, saw sales hit hard by the closure of pubs down by over 11%.
Pat Rigney, Drinks Ireland Chair, said the industry is looking forward to driving recovery in the sector.
He said they expect a number of trends to continue next year.
"The trends we expect to continue in 2022 include the ongoing shift to quality over quantity by consumers, a growth in the Ready To Drink (RTDs) category and the no and low alcohol category, the continued popularity of craft cider and beer, as well as Irish gin and Irish whiskey from producers around the country," he said.