The global Distilled Spirits Market is estimated to be valued at US$ 31.99 Bn in 2023 and is expected to exhibit a CAGR of 4.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
The distilled spirits market comprises alcoholic beverages that are produced by distilling fermented grains, fruits, or vegetables. Some common types of distilled spirits include whiskey, rum, gin, vodka, and tequila. These spirits have high alcohol content by volume ranging between 35-60%. Distilled spirits are quite versatile and can be consumed either on their own as cocktails or used in cooking. The growing demand for premium and craft spirits from young consumers is a major driver for the market. Manufacturers are introducing new flavors and limited edition variants to cater to evolving tastes. Increased socializing at bars and restaurants has also boosted on-premise consumption of various cocktails and mixed drinks containing distilled spirits.
Market key trends:
One key trend in the distilled spirits market is the rising popularity of premium and craft spirits. Young consumers in particular have developed interest in unique flavors, limited edition craft spirits made from local ingredients. This has led many small-scale distilleries to emerge offering artisanal spirits made in small batches. Consumers are willing to pay premium prices for these unique craft experiences. Another major trend is the growing experimentation with cocktail recipes at home. During the pandemic, many consumers took to learning mixology skills and experimenting with distilled spirits. Premiumization is also driven by rising disposionable incomes in developing countries fuelling the consumption of luxury spirits. Manufacturers are focusing on innovative marketing strategies and premium packaging to target this segment. E-commerce is further boosting availability of wide distilled spirits product ranges.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in distilled spirits market is low as it requires high capital to set up production facilities and distribution network. Moreover, established brands have strong consumer brand loyalty.
Bargaining power of buyers: The bargaining power of buyers is moderate as there are numerous global brands providing variety of products. However, switching costs are low.
Bargaining power of suppliers: The bargaining power of suppliers is low due to availability of raw material suppliers and brand companies having control over distribution.
Threat of new substitutes: Threat of new substitutes is moderate as beverages like beer and wine can be substitutes. However, customer preference for varieties in distilled spirits keeps the threat low.
Competitive rivalry: Intense competition exists among established distilled spirits brands to gain market share.
Key Takeaways
The Global Distilled Spirits Market Demand is expected to witness high growth, exhibiting CAGR of 4.8% over the forecast period, due to increasing disposable income and social acceptance in developing countries.
Regional analysis: Asia Pacific holds largest share in distilled spirits market and is projected to grow at fastest rate during forecast period owing to rising young population, changing lifestyle and increase in number of social gatherings in countries like China and India. North America is expected to account for significant market share owing to heavy product promotion and marketing activities by key players in the US.
Key players: Key players operating in the distilled spirits market are Diageo plc, Pernod-Ricard SA, Constellation Brands Inc., Brown-Forman Corporation, Remy Cointreau SA, Marie Brizard Wine & Spirits, Lapostolle SA, and Berentzen-Gruppe AG. These players are focusing on new product launches and enhancing their brand value through marketing strategies to strengthen their foothold in the competitive market.
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