Industry revenue recovers as demand increases for premium products
London, United Kingdom (PRWEB) October 15, 2012
The Spirit Production industry has suffered from declining revenue and weak revenue growth for the past five years. According to IBISWorld industry analyst Steven Connell, “declining per capita consumption of spirits, health awareness and societal concerns about the misuse of alcohol, fierce competition from cider and wine and the recession have all taken their toll on sales”. Once the growth category of the industry, ready-to-drink (RTD) spirits have almost halved in sales over the past five years, while supermarkets' own-label spirits have grown to hold a significant share of the market. Exports were the major driver of growth in the industry before the financial crisis, but subsequently slowed as the United States and European markets fell into recession. The industry will demonstrate growth of 2.6% in 2012-13, as rising prices and stronger demand from off-trade outlets fuel sales. IBISWorld estimates industry revenue will increase at an annualised 1.5% over the five years through 2012-13 to reach £4.35 billion.
Producers should be in better spirits during the next five years, as the recovering on-trade and the trend towards ongoing premiumisation boosts domestic demand. At the same time, robust growth in emerging markets and recovery in the developed world will underpin stronger exports. RTD cocktails are expected to be the fastest growing product segment. Cider and wine will continue to offer strong competition, as will supermarket discounting and further growth in own-label market share. The industry is likely to be affected by attempts to increase regulation and taxes on spirits, as the public campaign against alcohol misuse intensifies. Connell adds, “producers will increasingly focus on premium spirits as they attempt to combat declining spirit consumption”. Emerging markets in Asia, Eastern Europe and Africa will account for a growing proportion of exports and industry sales. This is expected to result in some bottling production moving offshore. Industry revenue is forecast to grow over the five years through 2017-18.
The Spirit Production industry displays a high level of market share concentration. The top five players in the industry account for over 70% of industry revenue between them. Major companies include Diageo, William Grant and Sons Distillers, Edrington Group, Chivas Brothers and Bacardi Martini.
For more information on the Spirit Production industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Firms in this industry distil, bottle and sell spirits and liqueurs to wholesalers, retailers and the on-trade.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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