The Alcoholic Beverage Industry Report 2021 An overview of a young and growing food industry sector in Sweden Introduction The COVID-19 panDemIC has CauseD great stresses and and financially insecure. On the contrary: despite the major challenges for society. All individuals, businesses pandemic and the constraints it has imposed on business and social institutions were forced to adapt when the operations, the number of producers continued to grow in COVID-19 coronavirus spread around the world starting in 2020.At the turn of 2020–2021, there were 768 companies the winter of 2020. registered in Sweden to produce spirits, wine, cider and beer. At the same time a year earlier, before the pandemic, The COVID-19 pandemic is the biggest health crisis for the number was 729. This corresponds to a growth rate of humanity in modern times. Some functions have been just over 5.3 percent. hit harder than others. Medical and care sector workers have made tremendous efforts to save lives and try to The strong growth in the Swedish alcoholic beverage stop the spread.In other sectors, such as hospitality and industry, which has primarily occurred over the past five to tourism, culture and events, and hotels and restaurants, ten years, thus continues. government restrictions and the loss of visitors have had dramatic consequences, with revenue losses of nearly 70 to 80 percent or more. Many businesses were also forced to make severe staff cutbacks through lay-offs and redundancies. The Swedish alcoholic beverage sensation appears to have The COVID-19 pandemic has also had far-reaching held its own during the 2020 repercussions for the Swedish producers of alcoholic pandemic year. beverages. Restaurants and bars, the hospitality industry and the events sector, such as concerts, are important customers for many alcoholic beverage producers, not The aim of the Alcoholic Beverage Industry Report 2021 is least the smaller ones. to provide a description of the current state of the Swedish production of alcoholic beverages, the industry’s size, Despite this situation, the phenomenon that is usually structure, breadth and location, and its future challenges. called the Swedish alcoholic beverage sensation still This report is the fourth about the Swedish production of appears to have held its own during the 2020 pandemic alcoholic beverages and covers the extent and location of year. Lacking current data about turnover and financial the alcoholic beverage industry up to the end of 2020. results for the industry, we can only observe that The Alcoholic Beverage Industry Report 2021 consists there has been no decline in the number of registered of two parts. Part 1, “The Swedish alcoholic beverage producers, as might have been feared given that many sensation”, presents developments in the industry during alcoholic beverage producers are recently established 2020. The statistics are based on data from Statistics 2 3 Sweden’s Business Register, which have been processed drink tourism and the hospitality industry, international and then supplemented with other source materials, development and responsible alcohol production. including from the Swedish Wine Association (Föreningen Svenskt Vin), which has more comprehensive statistics How we produced the report on the number of Swedish wine producers. To enable The section on the structure and size of the alcoholic comparisons, the previous year’s number of alcoholic beverage industry is based on statistics taken from beverage producers has been adjusted based on the new Statistics Sweden’s Business Register and supplemented information. Part 2, “The alcoholic beverage industry’s with data on Swedish wineries from the industry views on its present and future”, presents the results organisation of Swedish wine producers, the Swedish of an online survey conducted by the Ipsos market Wine Association. Some 20 companies are registered as research company in October to December 2020 among producers of two or more types of alcoholic beverage. Swedish alcoholic beverage producers about the current For this reason, the total number of producers differs situation, the future, and the issue of farm-gate sales of from the total of the producers in the respective beverage alcoholic beverages. The survey was commissioned by categories. The data refer to 31 December 2020 and 31 the Federation of Swedish Farmers (LRF) Local Food & December 2019. Beverages. An inspection of Statistics Sweden’s Business Register The Alcoholic Beverage Industry Report 2021 was shows that a number of businesses are miscoded. produced on behalf of Swedish alcoholic beverage They are registered as producers of alcoholic beverages producers: the Swedish Wine Association, the Federation but are actually involved in other activities. Double or of Swedish Farmers Local Food & Beverages and Swedish triple registration has also been detected. In preparing Producers of Alcoholic Beverages (SPAA). this report, these errors have been eliminated as far as Swedish-language versions of the previous Alcoholic possible. The figures for the number of producers on 31 Beverage Industry Reports of 2018, 2019 and 2020 are December 2019 have also been adjusted. This means that available for download at www.spaa.se. The first two the 2020 and 2019 statistics on the number of producers reports contain detailed accounts of the importance are not directly comparable to those in previous years’ of the Swedish alcoholic beverage sector to food and Alcoholic Beverage Industry Reports. ”We were thrilled that we could quickly adapt to become an important actor in society and contribute during the acute stage of the pandemic. Many of our industry colleagues followed our lead and together we were able to significantly increase the availability of hand sanitiser to those who needed it most in a pressured situation.” ANNA SCHREIL, VICE PRESIDENT OPERATIONS, THE ABSOLUT COMPANY 4 5 At The enD Of ThaT year 770 companies were registered What distinguishes Swedish alcoholic beverage production as producers of alcoholic beverages, that is, beer, distilled is instead its geographical distribution and the high spirits, cider and wine. This is an increase of 41 companies representation of more sparsely populated counties. 1. compared to 2019. At the end of 2020 Stockholm County had the most This represents a growth of 5.7 percent. This is lower alcoholic beverage producers at 141, followed by Skåne The Swedish alcoholic than for the next-previous year, when the number of County with 131 and Västra Götaland County with 122. producers increased by double digits in percentage Then came Halland and Uppsala Counties with 30 beverage sensation terms. However, given the COVID-19 pandemic in 2020, producers each. Västernorrland and Norrbotten Counties which particularly impacted the restaurant and hospitality are in fifth and sixth place respectively among Sweden’s industries, both crucial sources of revenue for alcoholic 21 counties, each with 26 registered producers. The production of alcoholic beverages is one of the fastest growing segments of the Swedish food beverage producers, the creation of new businesses industry. The number of producers has increased rapidly over the past decade. Despite the COVID-19 was surprisingly high. On average, each month saw Gotland, Dalarna and Jämtland Counties are also on the pandemic, the number of producers continued to grow in 2020. three to four new start-ups. This is evidence of a strong list of leading counties, which further confirms that a large entrepreneurial spirit and shows that people consider their number of the new start-ups in recent years have been in involvement in the sector to be a long-term investment. rural areas and small localities. The majority of companies are registered as producing one alcoholic beverage. A smaller number, around 20, state that they produce two or more alcoholic beverages, for example beer and whisky. This is evidence of a strong entrepreneurial spirit and The alcoholic beverage producers are distributed shows that people consider their throughout Sweden. Production occurs in all 21 counties involvement in the sector to be and in 75 percent of Sweden’s 290 municipalities – including some of Sweden’s smallest, such as a long-term investment. Robertsfors, Sorsele and Åsele in Västerbotten, Jokkmokk in Norrbotten, Eda in Värmland and Ydre in Östergötland Alcoholic beverage production facilities have become County. attractive tourist destinations in smaller localities, thereby boosting local business development and creating new The alcoholic beverage producers are most numerous jobs. This is clear not least from the media coverage in in the three metropolitan regions of Stockholm, Västra recent years. Götaland and Skåne. The producers total just over 390 in number but the three metropolitan areas are Unsurprisingly, Sweden’s largest cities in terms of actually underrepresented relative to the number of their population – Stockholm, Gothenburg and Malmö – have inhabitants. The three counties are home to 53 percent the highest number of alcoholic beverage producers of the Swedish population but have 51 percent of the among Sweden’s 290 municipalities. However, it is alcoholic beverage producers. It should also be noted that perhaps less well known that Höganäs, Kungsbacka and a number of companies legally domiciled in the Stockholm Simrishamn are among the ten municipalities in Sweden region, for example, have their production elsewhere in the with the highest concentration of alcoholic beverage country. producers – together with places like Helsingborg, 6 7 Karlstad and Sundsvall. As an important tourist The COVID-19 pandemic has created major challenges destination, Gotland occupies a special position in terms for the industry. Restrictions and closures in 2020 caused of its number of producers relative to its population. many companies to suffer a sharp drop in sales. At the same time, much creativity has been applied in trying to The Swedish alcoholic beverage industry consists mainly adapt to this extreme situation. A number of producers of small companies or ones led by entrepreneurs. Most chose to switch their production, for example over to were founded within the past ten years.