Beverage industry battling significant contraction of demand

Ljubljana – Slovenia’s major beverage companies are no exception when it comes to the devastating impact of the pandemic on the industry worldwide. Some companies have recorded a major drop in sales in the second Covid-19 wave, particularly due to the hospitality sector lockdown.

Retail demand has increased due to the closure of hotels, restaurants and bars, however the drinks companies do not believe that this uptick could offset or significantly mitigate the overall contraction.

Slovenian brewers, including the country’s largest beer maker Pivovarna Laško Union, have been experiencing the ramifications of anti-coronavirus restrictions since beer consumption largely depends on socialising.

An estimate by the Association of Slovenian Brewers shows that some 38,000 jobs are at risk due to the closure of restaurants, bars, pubs and cafes.

There is a silver lining – online shopping trends, which are expected to continue to point up.

Nevertheless, the situation is expected to remain precarious in the coming months, Pivovarna Laško Union has told the STA.

The Slovenian beer sector estimates that domestic sales of individual producers may drop by at least 30%, some may even experience a 95% contraction of sales.

Mineral water producer Radenska has told the STA that hospitality sector sales had ground to a halt during the second wave.

The wine sector is seeing similar problems. The winery Vina Koper told the STA that most of its plans had to be pushed back. After stabilising operations between May and September, it faces a challenging period, a season deemed vital for the sector.

The winery Klet Brda used to generate almost half of its income via exports, but this advantage turned to dust under current circumstances.

The company remains an optimist given foreign distributors’ forecasts and first positive signals from the US market.