Los Angeles, CA (PRWEB) May 14, 2013
Rising per capita spirits consumption in emerging countries and increasing demand for premium brands are driving revenue growth for the Global Spirits Manufacturing industry. However, the 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 2.2% annually during the five years to 2013. According to IBISWorld Industry analyst, Agata Kaczanowska, “in 2013, emerging markets will again provide most of the impetus for growth as debt-laden developed economies in Europe continue to struggle.” Consequently, revenue will grow about 3.3% to $241.6 billion in 2013.
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 made three acquisitions in emerging markets in 2012 including Halico, Sichuan Shuijingfang Co. and Ypioca cachaca, which are leading brands in the Vietnamese, Chinese and Brazilian markets, respectively”, adds Kaczanowska. Consolidation is expected to make it easier for companies to pass on rising input prices to consumers. Further, 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. 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 during the past five years. As a result of consolidation, the number of enterprises is expected to decline.
The Global Spirits Manufacturing industry is estimated to have a low level of market share concentration. This is because 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 a majority stake in United Distillers Limited, a major Indian distillery. Diageo also made three significant acquisitions throughout 2012 in emerging markets like Brazil and China. The largest companies in the industry are Diageo, Pernod Ricard and Brown-Forman.
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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