Spirits Industry

The global spirits manufacturing industry is set to witness a solid period of growth over the five years through 2017, but at a slower rate than during the previous five years, according to market research report by research firm IBISWorld.

According to the IBISWorld report, revenue of global spirits manufacturing industry increased at a rate of 4.1% over the five years through 2012 to a total of $98.3bn.

Till 2009, the industry grew, due to rising per capita spirits consumption in developing countries and increasing demand for premium brands.

During 2009 economic recession, the industry was affected due to collapse in air travel weighing on business and duty-free sales and lack of demand for the products.

However, in 2010-11, the growth picked up and sales of Scotch whiskey and Cognac in the emerging markets picked up.

By 2012, the industry is expected to growth at a rate of 2.7%.

While Scotch whiskey, vodka and bourbon are expected to perform well for spirits, the demand for liqueurs could be through cocktails.

Consumers across the globe will switch from basic to premium spirits brands, thereby will help producers increase profitability, according to the report.

Brand premiumisation and volume growth in developing countries are expected to be the driving force behind the growth of global spirits manufacturing industry

In terms of concentration, four major companies account for 40% of the industry revenue. The concentration is on rise following major acquisitions like Pernod Ricard and Fortune Brands’ acquisition of Allied Domecq.

Headquartered in Los Angeles, IBISWorld provides information and analysis on every industry in the US. It serves different range of business including professional service and government organizations.

Image: Scotch whiskey and Cognac helped in the growth of spirits industry after the recession in 2010-11. Photo: zirconicusso