The premiumisation trend in alcoholic drinks shows no signs of slowing as producers focus on quality over quantity, and value over volume.
With consumers paying heed to economic and health concerns, a more selective mind-set has developed when it comes to choosing which beverage to purchase. With this in mind, brewers and distillers are ensuring that they can offer the consumer a higher quality product than their competitors in a bid for market share and value.

The global alcoholic market is seeing strategies encouraged to boost premium brands in terms of SKUs, awareness, and consumer reach. In the beer market, Heineken is pushing its premium namesake lager brand and has made serious investment into wider market presence. Meanwhile spirits are seeing a revolution, with both gin and whiskey distillers riding the wave of consumer interest in premium offerings. Any losses or stagnations in mainstream and discount volumes were offset by gains for premium and super-premium products.

Heineken has made the most significant move in 2017 so far by purchasing Kirin Brazil from Japan’s Kirin Holdings Co Ltd for a reported €1 billion. This means that Heineken has secured a substantial share in the Brazilian beer market, one of the largest by volume globally, and also acts as a challenge to global market leader AB-InBev’s recent takeover of SAB Miller.

AB-InBev’s acquisition of SAB Miller ensured its lead in the global beer market, and also threatened Heineken’s dominant markets. Now it appears that Heineken is directing its strategy to compete directly with AB-InBev in more markets, and with both companies already holding significant volume, the battle turns to value. Going forward, Heineken has manoeuvred itself into a more effective position to drive its premium Heineken and Sol brands into willing markets.

The spirits market has also seen a revitalisation thanks to the growing interest in quality products. Whiskey is recording strong growth in many markets after a period of stagnant performances thanks to explosive growth in emerging markets. In developed markets where whiskey is already established, large distillers are looking at new premium offerings to catalyse growth. Diageo has begun production of a new whiskey blend called Roe & Co out of the iconic St James’ Gate brewery in Dublin. The name harks back to one of the original whiskey brands that drove the golden era of Irish whiskey in the 19th century, and aims to return the category to one of luxury and fine quality.

Gin has also seen strong results during a successful winter period, where it was the spirit of choice for trendy drinkers. While declining volumes threatened to drag the category down, the premium and super-premium sub-categories offset these losses by a much needed boost to the value of the category. The spotlight was on gin in a crucial Christmas period in West Europe and the USA, and a huge influx of new craft gin brands allowed for distillers to capitalise on the increased consumer interest.

As consumer buying habits adapt to improved economic conditions, and an increased awareness from producers of what consumers want, we can expect to see the premiumisation trend continue. The alcoholic drinks industry and its clientele have entered into a marriage of convenience, with consumers having a wider range of quality products to choose from, and producers enjoying increased value from their investments.

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