Aspirational consumption and in emerging markets has kept revenue on the rise
Los Angeles, CA (PRWEB) November 09, 2012
Rising per capita spirits consumption in emerging countries and increasing demand for premium brands are driving industry revenue growth. However, the Global Spirits Manufacturing industry was hit hard by the economic downturn during 2009, with recession in many key markets constraining demand, and a collapse in air travel weighing on business and duty-free sales. “Although developed markets constrained demand, overall industry performance remained moderate, with industry growth estimated at an average rate of 4.1% annually during the five years to 2012,” says Agata Kaczanowska. In 2012, emerging markets will again provide most of the impetus for growth as debt-laden developed economies continue to struggle in Europe. Consequently, revenue will grow only about 2.7% to $229.9 billion in 2012.
During the next five years, companies are expected to continue seeking out growth opportunities in emerging economies through mergers and acquisitions. For example, major company Diageo is in talks to buy Mexican distiller Tequila Cuervo SA, the producer of Jose Cuervo-branded spirits. Furthermore, rising disposable income in emerging markets will also help drive higher volume sales and revenue during the next five years. In particular, Asia will become increasingly important to the industry as a burgeoning population, rising disposable income and aspirational consumption drive demand for regional spirits as well as international Scotch, vodka and cognac brands. Firms will increasingly compete across a range of spirits products. IBISWorld forecasts that Global Spirits Manufacturing industry revenue will grow at an during the five years through 2017.
Premiumization will also increase market share for larger companies, which are most likely to produce premium spirits. Major distilleries are expected to continue aggressive acquisition strategies like during the past five years. As a result of consolidation, the number of enterprises is expected to decline at a 2.3% annualized rate during the five years to 2017 to 13,139 businesses. The top four companies in the industry are estimated to generate about 18.6% of 2012 revenue. According to Kaczanowska, in volume terms, the concentration is even lower. This is because the global premium brands are owned by a smaller group of relatively large companies, which are taking on growth opportunities through regular acquisition activity. For example, major company Diageo is in talks to acquire Tequila Cuervo SA, the Mexican distillery that produces the premium tequila brand Jose Cuervo. For more information, visit IBISWorld’s Global Spirits Manufacturing industry report page.
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IBISWorld industry Report Key Topics
This industry consists of distilleries that purchase a range of ingredients, such as grains and sugar, and manufacture them into spirits (i.e. not beer or wine). These spirits are then bottled and sold to liquor wholesalers, bars, casinos, restaurants, hotels and other retail stores.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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