Strong sales of Scotch whisky and premium products are supporting revenue
London, United Kingdom (PRWEB) April 16, 2013
The Spirit Production industry has performed well during the past five years. According to IBISWorld industry analyst Steven Connell, “since 2008-09, dire economic conditions and the long-term decline in spirit consumption have constrained domestic consumption of spirits but this has been more than offset by a boom in demand for exports, particularly of Scotch whisky”. Demand for whisky has soared in emerging markets across Asia, Latin America and Africa due to aspirational spending by young, affluent consumers. These trends will continue in 2012-13, and help support revenue growth of 3.5% in 2013-14. During the five years through 2012-13, revenue is estimated to grow at a compound annual rate of 4.2% to £4.9 billion.
Industry profitability is estimated to grow moderately over the period. Booming export sales of regular and premium spirits, particularly whisky, have been the major driver of this. Weak domestic demand for spirits and declining sales of ready-to-drink beverages, such as alcopops, have reduced profitability, and producers have had to contend with rising input costs. However, rising profitability overall has attracted substantial investment in the industry. Enterprise and establishments are estimated to grow at a compound annual rate of 2.7% and 2.2% respectively over the five years through 2012-13. Employment is forecast to grow at a compound annual rate of 1.6% over the same period.
The Spirit Production industry is expected to continue expanding strongly over the next five years. Connell adds, “the recovering on-trade and ongoing premiumisation trend should assist domestic sales, while aspirational spending in emerging markets is expected to underpin solid growth in exports”. Investment is anticipated to continue flowing into the Scottish whisky industry, boosting both production and employment. Exports are expected to make up an increasing share of revenue over the next five years as domestic sales lag behind exports. Product innovation and the lasting shift to premiumiusation will be important drivers of growth over the next five years. Industry revenue is forecast to continue to grow over the five years through 2017-18.
The Spirit Production industry displays a moderate level of market share concentration. The top five players in the industry account for nearly 75% of industry revenue between them. Major companies include Diageo, William Grant and Sons, Edrington Group, Chivas Brothers and Bacardi Martini.h whisky industry.
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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