The international marketplace will grow at a faster pace than locally produced spirits over the next five years, according to the IWSR Forecast Report 2013-2018. Imported spirits are forecast to grow at a compound annual growth rate (CAGR) of 3% until 2018, while local drinks are expected to see growth rates slow to 1.3%.
A number of key markets (with the significant exception of China) are experiencing a shift away from traditional spirits. Russia and Germany are among these.
The slowdown in growth of local spirits will lead to a decline in the rate of growth of spirits overall. The CAGR of total spirits consumption is forecast to drop from 6.4% between 2007 and 2012 to 1.5% between 2012 and 2018.
The report notes several key reasons for the slowdown:
The baijiu market, which accounts for 38.7% of global spirits consumption, is set for a period of much more moderate growth after surging volumes in the past five to 10 years.
The conversion in India of much country liquor to IMFL (Indian-Made Foreign Liquor) is largely over for now.
The declared intent of the Russian Government to reduce alcohol consumption and corresponding anti-alcohol measures (in particular the introduction of the minimum price) has pushed a great deal of consumption back to the grey market.
Despite the slowdown, the local spirits category will grow by more than 222m nine-litre cases by 2018, while a further 67m cases will be added to the imported spirits category, increasing the market share of imported spirits to 12.3%, up from 11.3% in 2012.
Whisk(e)y, vodka and rum are set to be the top three largest growth imported spirits categories over the next five years. Imported whisk(e)y volumes are forecast to grow at 3% CAGR over the next six years, and the category is expected to grow to just below 154m cases by 2018.
Imported vodka is expected to grow faster than the total global vodka market. Overall, vodka is set to add 18.5m cases to its total volumes.
Imported rum’s growth will continue at the same rate as in the recent past, reaching a CAGR of 3.8%. However, total rum growth will slow from 3.8% in the last five years to 1.1% during the forecast period. Total overall volumes will amount to 156m cases of which 34m cases will be imported rum.
Global consumption of spirits is expected to reach 3.37bn cases by 2018, a significant rise of nearly 290m cases over 2012 levels.
About the IWSR Forecast Report 2013-2018
The forecast report analyses and highlights the prospects for growth in wine, spirits, mixed drinks, beer and cider over the next five years. Individual reports are available for 61 countries. The reports consider the most recent trends and forecast the development of these markets until 2018, with insights written by the IWSR researcher responsible for each particular market. The report is not a straight-line forecast, but is shaped to take account of local factors – it includes detailed explanations as to why and how volume trends have been forecast. A global summary of the forecast is also available.
About the IWSR
The IWSR is the leading provider of data on wine, spirits and RTDs. The IWSR’s database, essential to the industry, is used by all of the largest multinational wine and spirits companies, as well as many more local companies. The IWSR has a unique methodology which, by tapping into local country expertise, allows us to get closer to what is actually consumed and better understand how markets work. The IWSR conducts face-to-face interviews with over 1,500 companies in 115 countries each year, with further input from 350 companies. The IWSR tracks overall consumption and trends at brand, quality and category level for wine, spirits and RTDs, and aims to provide data that is as accurate and detailed as possible