Cocktail culture and the premiumisation of the beverage market will boost demand for pre-mixed cocktail drinks and value-added bottled spirits.
Melbourne, Australia (PRWEB) February 16, 2015
Australia imports the majority of the spirits it consumes. As a result, players in the Spirit Manufacturing industry in Australia supply less than 40% of domestic demand. For some products, a degree of transformation occurs domestically, particularly in the case of ready-to-drink (RTD) beverages, which compose the majority of industry revenue. According to IBISWorld industry analyst Ryan Lin, “over the past five years, the industry has recovered from effects of the alcopops tax in 2008, which reduced demand for RTDs.” This recovery has been helped by an increased demand for bottled spirits and ready-to-serve cocktail products. Industry revenue is forecast to grow at an annualised 1.8% over the five years through 2014-15. In 2014-15, industry revenue is expected to grow by 2.4% to $508.8 million, assisted by rising consumer discretionary income and favourable export conditions.
Conditions within the Spirit Manufacturing industry have varied over the past five years. Increased health consciousness and stagnant alcohol consumption have restricted consumption growth in overall volume. “This has been partly offset by a trend towards more expensive spirit consumption, and a growing consumer willingness to try new industry products,” says Lin. The RTD segment has remained subdued since the introduction of the alcopops tax in 2008, which raised prices and placed greater restrictions on marketing. However, the good value of many Australian spirits, increasing consumer preference for local products and the growing popularity of Australian whisky and gin have all aided industry revenue growth. These factors bode well for domestic manufacturers. The industry exhibits a medium level of market share concentration. Major players include Diageo Australia Limited, Asahi Holdings (Australia) Pty Ltd, Coca-Cola Amatil Limited and Bacardi Lion Pty Limited.
Over the five years through 2019-20, factors such as the rise of cocktail culture and the premiumisation of the beverage market are expected to boost demand for pre-mixed cocktail drinks and value-added bottled spirits. Imports are likely to continue to dominate the industry as imported spirits remain popular and international manufacturers diversify their product lines. Sales of Tasmanian-produced whisky are forecast to grow strongly as the state's reputation as a producer of premium single malts strengthens. The initial success of Australian spirits is likely to encourage a more diverse range of boutique distillers to enter the Spirit Manufacturing industry. However, growing competition from cider, beer and wine manufacturers will likely threaten industry revenue over the next five years.
For more information, visit IBISWorld’s Spirit Manufacturing industry in Australia report page.
This industry purchases ingredients such as grapes, sugar and malt, which are fermented and distilled to produce spirit beverages including vodka, gin, whisky and liqueurs; industry participants also blend spirits. Operators buy glass bottles and paperboard containers to package these products. The spirits are then sold to alcoholic drink wholesalers and retailers. While the industry makes fortified spirits, it does not produce fortified wines.
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