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The premium spirit market size is forecast to increase by USD 54.8 billion at a CAGR of 6.55% between 2023 and 2028.
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The premium spirits market has witnessed significant growth in recent years, with consumers increasingly seeking authentic beverages that offer superior taste and quality. This trend is not limited to any specific demographic but has gained traction among various age groups, particularly those with a discerning palate. The alcohol industry has seen a shift towards premiumization, with consumers willing to pay a premium for spirits that offer unique flavors and distinct aromas. This trend is driven by several factors, including lifestyle changes, social media influence, and the desire for authentic experiences. Technology is playing an essential role in every aspect of the value chain, from production to marketing. Despite challenges, the market is expected to continue its growth trajectory, driven by consumer preferences and innovative product offerings.
One of the key factors fueling the growth of the premium spirits market is the millennial generation. This demographic is known for its preference for experiences over material possessions and is willing to spend on high-quality drinks, especially when it comes to cocktails. Margaritas, martinis, manhattans, and other classic cocktails continue to be popular choices, with consumers seeking out authentic recipes and bartending skills. Another factor driving the growth of the premium spirits market is the increasing popularity of DIY cocktails and spirit-based RTD mixes. With the rise of mixology, consumers are experimenting with herbs and spices to create unique and personalized drinks at home.
This trend has led to an increase in demand for high-quality liquor and alcoholic spirits, as consumers seek to create authentic and delicious cocktails. Restaurants and bars have also played a significant role in the growth of the premium spirits market. These establishments have recognized the demand for premium products and have responded by offering a wider range of spirits and cocktails along with RTD alcoholic beverages. Tourists, in particular, are drawn to these establishments, seeking out new and authentic experiences. The premium spirits market is not just about taste and quality, but also about the medical benefits associated with moderate alcohol consumption.
Distillers have responded to this trend by producing spirits that offer health benefits, such as those made with natural ingredients and low sugar content. In conclusion, the premium spirits market is experiencing steady growth, driven by factors such as lifestyle changes, social media influence, and the desire for authentic experiences. Consumers are willing to pay a premium for high-quality spirits, particularly when it comes to cocktails, and the alcohol industry is responding by offering a wider range of premium products. including craft spirits. The future of the premium spirits market looks bright, with continued innovation and a focus on authenticity and quality.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The off-trade segment is estimated to witness significant growth during the forecast period. In the off-trade market for premium spirits in North America, key players include distillers and retailers such as supermarkets and hypermarkets. These retailers maintain large inventories of various alcoholic spirits brands, providing consumers with a diverse selection. Supermarkets and hypermarkets are witnessing growth due to the expansion of their retail footprint, with companies like Aldi planning to open 120 new stores in the US by 2023. Other major retailers also contribute significantly to the market. The convenience of being able to purchase a wide range of premium spirits under one roof is a significant factor driving sales in this channel.
The quality of spirits is a crucial factor influencing consumer preferences. Distillers use herbs and spices to enhance the taste and aroma of their products. Social media influence plays a role in shaping consumer trends and preferences. However, high taxes on alcoholic beverages can impact sales.
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The off-trade segment was valued at USD 71.00 billion in 2018 and showed a gradual increase during the forecast period.
Europe is estimated to contribute 29% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market in Europe is experiencing consistent expansion, particularly among the Millennial generation. This demographic is driving the demand for High end drinks, including Cocktails such as Margaritas, Martinis, and Manhattans. Cocktail culture is on the rise, leading to an increase in alcohol consumption. Authentic beverages are preferred, with European countries like France, Germany, Russia, the UK, Belgium, Romania, and Poland being major consumers. Wine remains the most popular choice among the elderly, who opt for premium varieties. However, spirits like whiskey, vodka, liqueurs, and brandy are also in high demand. The consumption of whiskey and brandy is growing at a faster rate than other spirits. Alcoholic beverage consumption in Europe has been on the rise, presenting significant opportunities for businesses in this sector.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Growing demand for premium drinks by the millennial generation is the key driver of the market. Millennials, as a substantial consumer demographic in the alcohol market, have shown a preference for high-end drinks, particularly premium spirits. This generation, now past the legal drinking age (LDA), possesses considerable purchasing power and is increasingly drawn to authentic beverages, such as cocktails like Margaritas, Martinis, and Manhattans. The premiumization trend in the spirits industry is being fueled by the growing cocktail culture, as consumers seek out superior ingredients and refined production processes. The market is experiencing growth due to several factors. Rising disposable income enables consumers to invest in quality alcohol, and health-conscious individuals are opting for low alcohol beverages.
Moreover, the on-trade and off-trade sectors, including on-trade establishments like pubs and bars and off-trade sales through specialty stores and e-commerce platforms, are capitalizing on this trend. Distillers are focusing on natural spirits, flavored spirits, and luxury spirits, using natural ingredients, herbs, and spices to create distinctive aromas and flavors. Superior ingredients, purity, and clarity are key factors in the production of premium spirits, which are increasingly popular among consumers. The maturation process, a crucial aspect of distillation, contributes to the superior quality of these spirits. The alcohol industry is adapting to lifestyle changes and social media influence. Luxury spirits are being marketed as lifestyle accessories, and distilleries are implementing carbon-neutral and sustainable production processes. Bartending skills and mixology are gaining popularity, with DIY cocktails and resto bars offering unique experiences. Despite high taxes, the market for premium spirits continues to grow, driven by the desire for quality and the allure of the bar culture.
Increasing dependence on technology throughout the value chain is the upcoming trend in the market. The market caters to the Millennial generation's growing preference for high-end drinks, with a focus on authentic beverages and superior quality. Cocktail culture is thriving, with popular choices including Margaritas, Martinis, Manhattans, and more. The alcohol industry is responding to health-conscious consumers by offering low alcohol beverages and natural spirits infused with herbs and spices. Technological advancements, such as personalized apps and infusion machines, are revolutionizing the on-trade and off-trade landscapes. Brands are investing in refined production processes and natural ingredients to deliver clarity, purity, and distinctive aromas. E-commerce platforms and social media are influencing drinking habits, making it easier for consumers to purchase Premium spirits from the comfort of their homes.
Luxury spirits, such as tequila, vodka, luxury whiskey, gin, rum, brandy, and flavored spirits, are in high demand. Distilleries are adopting carbon neutral practices and superior ingredients to cater to the evolving market. The alcohol industry is adapting to lifestyle changes, with a focus on mixology, bartending skills, and DIY cocktails in resto bars. Despite high taxes, the market is growing, with tourists and specialty stores driving demand for premium products.
The rising launch of campaigns against alcohol consumptions is a key challenge affecting the market growth. The market in the US faces challenges due to increasing campaigns against alcohol consumption, particularly among the millennial generation. These efforts, led by regulatory and social organizations, aim to raise awareness about the health risks associated with excessive alcohol intake. For instance, Dry January, a campaign by Alcohol Change UK, encourages participants to abstain from alcohol during the first month of the year. This trend, driven by health-conscious consumers, has influenced the alcohol industry to offer low alcohol beverages and natural spirits. Despite these challenges, the premiumization trend continues to influence the spirit market. Consumers seek authentic beverages, distinctive aromas, and superior ingredients in their high-end drinks, such as cocktails like Margaritas, Martinis, Manhattans, and more.
However, the on-trade and off-trade sectors, including bars, pubs, and specialty stores, cater to this demand. E-commerce and social media have also played a significant role in the growth of the market, enabling consumers to access a wide range of premium spirits from distilleries and on-trade establishments. The spirit production process, from distillation to maturation, is undergoing refined processes to ensure purity, clarity, and natural ingredients. Distillers are focusing on carbon neutral production and using herbs and spices to create flavored spirits. The alcohol industry continues to innovate, offering natural spirits, flavored spirits, and luxury spirits, catering to the changing lifestyle and drinking habits of consumers. Despite high taxes, the market for premium spirits remains strong, driven by the desire for quality alcohol and the allure of bar culture and mixology.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth analysis report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Bacardi Ltd. - The company offers premium spirits such as Bacardi, Grey Goose, and Patron.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The millennial generation is driving the growth of high end drinks in the premium spirits market. Cocktail culture is on the rise, with authentic beverages like margaritas, martinis, manhattans, and more becoming popular choices. Health-conscious consumers are opting for low alcohol beverages and natural spirits, including tequila, vodka, whiskey, gin, rum, brandy, and flavored spirits. Premiumization is a key trend, with consumers seeking luxury spirits and superior quality alcohol. Distillation and maturing processes are crucial in creating distinctive aromas and flavors. Natural ingredients, herbs, and spices are also important in producing authentic, refined spirits. On-trade establishments and off-trade sales are both thriving in the alcohol industry.
In summary, e-commerce and social media are influencing purchasing habits, making it easier for consumers to access premium products from anywhere. The alcohol industry is adapting to lifestyle changes, with a focus on carbon neutral production processes and superior ingredients. Refined production methods ensure purity, clarity, and maturation, while bartending skills and mixology continue to evolve. Diy cocktails and resto bars are popular, with tourists and premium product enthusiasts seeking out specialty stores for unique and authentic drinking experiences. The alcohol industry continues to evolve, offering a wide range of options for consumers looking to indulge in the rich and diverse world of spirits.
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Market Scope |
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Report Coverage |
Details |
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Page number |
167 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.55% |
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Market growth 2024-2028 |
USD 54.8 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
5.79 |
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Regional analysis |
Europe, APAC, North America, South America, and Middle East and Africa |
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Performing market contribution |
Europe at 29% |
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Key countries |
US, China, UK, France, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Alliance Global Group Inc., Allied Blenders and Distillers Pvt. Ltd., Bacardi Ltd., Becle S.A.B. de C.V., Brown Forman Corp., Campari Group, Constellation Brands Inc., Diageo Plc, Fifth Generation Inc., Heineken Holding NV, Hite Jinro Co. Ltd., LVMH Group., Pernod Ricard SA, Remy Cointreau SA, Roust, Sazerac Co. Inc., Suntory Holdings Ltd., Tanduay Distillers Inc, The Edrington Group Ltd., and William Grant and Sons Ltd |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market forecast report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Distribution Channel
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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