by Distilled spirits refer to alcoholic beverages that are produced by distilling ethanol from fermented grains, fruits, or vegetables. Some common examples of distilled spirits include vodka, gin, rum, tequila, whiskey, and brandy. The global distilled spirits market includes liquor and other alcoholic drinks like beer and wine. Customarily, spirits are alcoholic beverages that fall between wines and beers in terms of alcohol content. Distilled spirits are consumed for recreational purposes as well as in religious ceremonies across the globe. The market is driven by factors such as increase in social gatherings and parties, rise in disposable income, growing demand from the millennial population, and product innovation through infusion of different fruits and herbs.
The global distilled spirits market is estimated to be valued at US$ 31.99 Bn in 2023 and is expected to exhibit a CAGR of 7.2% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Rising demand from the millennial population is expected to drive the growth of the distilled spirits market over the forecast period. Millennials prefer experimenting with premium and craft spirits brands that offer unique flavors and taste experiences. The global millennial population reaching drinking age has significantly contributed to the rise in consumption of premium and super-premium spirits in the past few years. Additionally, social media marketing campaigns by key players targeted at the millennial demographic have further fueled the demand. Moreover, changing lifestyles and rising disposable income have enabled millennials to spend more on luxury alcoholic beverages. For instance, millennials in the U.S. are the biggest customers of premium spirits such as tequila and mezcal. Therefore, the growing demand from millennials acts as a major driver for the market.
Further, the opportunity highlighted in the heading of rising demand from the millennial population also drives the market. The millennial population prefers unique flavors and experiences in alcoholic beverages. They are inclined towards craft and premium distilled spirits offerings infused with fruits and herbs. Hence, their experimentative buying behavior and high spending on luxury spirits has significantly contributed to the market growth over the recent years. Additionally, aggressive social media marketing campaigns targeted at millennials by key players have further augmented the demand. Therefore, the expanding millennial demographic and their preference for premiumization is expected to act as a key growth driver for the global distilled spirits market over the forecast period.
Segment Analysis
The distilled spirits market is dominated by the whisky segment which holds around 30% share of the total market. Whisky is the preferred choice of spirit among consumers across regions. Within whisky, scotch whisky dominates with over 50% share due to high demand from Europe and North America. Brand recognition and premiumization have led scotch whisky to gain significant market share over other whisky variants.
PEST Analysis
Political: Trade agreements and tariffs impact the affordability and availability of distilled spirits across borders. Regulations concerning advertising and consumption influence demand patterns.
Economic: Income levels and disposable incomes determine the consumption of premium and super premium distilled spirits variants. Economic slowdowns may cause consumers to switch to lower priced products.
Social: Changing social norms and health consciousness impact perceptions towards alcohol consumption. However, rituals and occasions continue to support consumption.
Technological: Innovation in packaging, size, formulations help manufacturers attract new consumers and drive trials. Advanced production technologies ensure quality and consistency.
Key Takeaways
The Global Distilled Spirits Market Share is expected to witness high growth driven by rising incomes, changing social trends and product innovations.
Regional Analysis: The Asia Pacific region is projected to be the fastest growing market for distilled spirits led by countries like China, India and Indonesia. Mature markets of North America and Europe will also contribute significantly to revenues supported by availability of wide product ranges and customization.
Key players operating in the distilled spirits market are Nestlé, Nutricia, Unilever, BASF SE, Abbott, Arkopharma Laboratories, GSK plc., ADM (Archer Daniels Midland Company), DuPont, Kellogg’s Company, Arla Foods amba, DSM, Quantum Naturals Ltd., Adcock Ingram, Ascendis Health Limited, iNova Pharmaceuticals, Vital Health Foods, Jamjoom Pharma, Creso Pharma, and ConnOils LLC. These players are focusing on expansion in high growth regions through tailored offerings, promotions and partnerships with regional or local players.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
