global spirits market trends - vinexpo paris 2020 · global spirits market trends - vinexpo paris...

Thorsten Hartmann – Custom Analytics Director, the IWSR

Vinexpo Paris, February 10, 2020

Copyright 2020 – The IWSR – Not to be reproduced or resold without permission from the IWSR.

Global Spirits Market Trends


Expertise:

• 45+ years of international

beverage market research

• Specialise in just beverage

alcohol: beer, wine, spirits,

cider, mixed drinks

About the IWSR

Breadth & Depth:

• 160 countries covered

and forecasted

• 24,000+ brand lines

tracked

• 400,000+ data points

updated, including price

and duty free

Category Leadership:

• Trusted partner for beer,

wine and spirits suppliers,

financial, and non-

alcoholic beverage

companies

• Forecast experts in what’s

next

Market Intelligence:

• Our analysts travel the

world in order to meet

over 1,600 local

professionals to capture

market trends – the ‘why’

behind the numbers

• Global Overview

• Global Forecast 2018-2023 – Beverage Alcohol

• Regional growth

• Top markets by category

• Top global brands by category

• Spirits: Growth by sub-category 2018-2023

• Largest-growing spirits brands

• Macro Trends

• Experience

• Ethical Choices

• Moderation

• Rise of contemporary spirits

• Premiumisation

• Convenience

• Hard seltzers – a threat to spirits?

• Digital engagement

• Ecommerce

• US on-premise trends

Agenda



Global overview

Global Forecast Volume: 2018-2023 CAGR

Wine -0.2%Beer +0.7%Spirits +0.6%Cider +2.0% RTDs +5.6%



Five-year global outlook

-50 000

0

50 000

100 000

150 000

200 000

Source: IWSR 2019

Driven mainly by US,

Italy and Russia

Indian & US

whisky driving

growth

UK,

Philippines,

South Africa

trend

Led by US and

Japan

Led by UK,

South Africa

Russia is 55% of world

consumption

‘000s

nin

e-l

itre

case

s

Global Category Performance Trends (2018-2023) (excluding beer)

Regional growth: past five years versus next five years

North AmericaCAGR

2013-2018 0.2%

2018-2023 - 0.2%

Africa and Middle EastCAGR

2013-2018 2.0%

2018-2023 2.3%

Asia PacificCAGR

2013-2018 -1.6%

2018-2023 0.5%

EuropeCAGR

2013-2018 0.4%

2018-2023 0.4%

Regional comparison – CAGR 2013-2018 v. 2018-2023 – all beverage alcohol categories

Central AmericaCAGR

2013-2018 5.8%

2018-2023 4.1%

South AmericaCAGR

2013-2018 - 0.9%

2018-2023 1.5%

CISCAGR

2013-2018 -3.6%

2018-2023 -1.3%

Travel RetailCAGR

2013-2018 2.4%

2018-2023 1.7%



Top Markets by Category (2018 Volume)

SPIRITS RTDsCIDERBEERWINE

5-Year CAGR Forecast to Decline 5-Year CAGR Forecast to Grow

1. United Kingdom

2. South Africa

3. United States

4. Australia

5. Spain

1. United States

2. Japan

3. Australia

4. South Africa

5. Mexico

1. China

2. United States

3. Brazil

4. Mexico

5. Germany

1. China

2. India

3. United States

4. Russia

5. South Korea

1. China

2. United States

3. Italy

4. France

5. Germany


Top Global Brands by Category (Volume)

SPIRITS RTDsCIDERBEERWINE

Spirits: Growth by sub-category 2018-2023

‘Less but better’ is the outlook for vodka and national spirits. Superior volume growth in the standard-and-

above brackets is a feature of most sub-categories. India Whisky an Exception!


Largest-growing international brands by spirits category

Largest-growth gin Largest-growth vodka Largest-growth aperitif

Largest-growth US whiskey Largest-growth Scotch

+1.5m nine-litre cases

Absolute volume change 2017-2018


+1.3m nine-litre cases +0.9m nine-litre cases




Macro Trends

Copyright 2019 – The IWSR – For client use only. Not to be reproduced or resold without permission from the IWSR.

Macro Trends

ExperienceRise of

contemporary

spirits

ModerationEthical choices


Digital

engagementPremiumisation Convenience Hard seltzers Ecommerce


Experience


Global….The Experience Economy


On/Off-Premise

No longer the only way for

consumers to try and buy;

tradition-based

E-Premise

Driven by price, social media

savvy & demand culture;

convenience-based

Product-Premise

On-site brewery, distillery &

winery sales are skyrocketing;

authenticity-based

New-Premise

Outdoor concerts, sporting

events, pop-ups, mobile bars;

experience-based

MY

Premise

Source: The IWSR


Ethical choices


Plastic Free HealthSustainability Veganism

Ethical decision drivers


Ethical trends product showcase

Moderation

Health & Wellness


Low- & No-Alcohol Low CarbsLow Sugar Free from

Health influenced trends



Why do I want to stop drinking?

Q7. Why are you considering, or have you considered, lowering your alcohol intake? Visualisation of number of mentions based on multiple choice question. Base size: n=262

Training for sports event (e.g. marathon, cycling race etc.)

I don't like the taste of alcohol

Religious reasons

As an alternative when driving

I don't like the effect of alcohol

Cost

I don't like having hangovers

Medical reasons

Weight loss

As a healthy lifestyle choice

Gender by lowering alcohol intake

Male Female

Source: IWSR No/Lo Alcohol Study 2019


``

• It’s all about no-alcohol – the trend in specialist products definitely

points towards alcohol elimination, not reduction – however, with some

notable exceptions such as the thriving US market for low-alcohol

beer and RTDs

• Beer is ahead of the game – No- and low-alcohol beer solutions are

already mainstream where the rest of the beverage alcohol market is still

distinctly niche

• Consumers feel underserved – limited product choice and scarce

availability is a key issue. There is latent demand, and ecommerce helps

• Generation Z dictates the pace – slated to desire no-alcohol options at

their favoured locations, suitable for social media feed, and not pay a

premium

• On-premise is not yet fully supportive – where supermarkets and

ecommerce are starting to formalise their offering, on-premise lags

behind. There are regional differences in whether on-trade sees

opportunities, or is opposed

Low-/no-alcohol key trends


Low- and No- innovation showcase



The Power of Plants

Botanicals: resurgence of premium+ gin (9.7% CAGR by 2022 globally) and brands highlighting botanicals as a product benefit.

Agave: Mezcal consumption in the U.S. was up 40%% in 2019, posting the largest gain among all spirits; tequila up 9.3%.

Veganism: One of the fastest-growing consumer trends, with sales of plant-only foods rising 20 percent in the U.S. in 2018, to $3.3 billion.

Cannabis: CBD products claiming to fight anxiety, pain and other ailments everywhere from CVS to Neiman Marcus; seen as natural alternative

Rise of contemporary spirits


Contemporary whiskies are invigorating the category


Gin’s versatility is ideal for innovation


Premiumisation


4.7% Forecasted CAGR 2018-2023

for premium-and-above spirits

compared to 0.4%for standard-and-below spirits

Growth of premium spirits market



Status Spirits accounts for:

0.2% of the spirits market volume

3.0% of the global value

A prize in excess of $6bn for international

spirits categories.

Status Spirits



Convenience


Better-for-You Convenience

Mood-Based Consumption

At-Home Occasions/Delivery Sustainability &

Alternative Packaging

Functional Beverages

Inclusivity Across Categories

Low/No Alcohol & Sugar


Global….the rise of the Pre-mix/Batched Cocktail



Convenience…. or one-off expenditure vs value-for-money?


Hard Seltzers

A threat to spirits?


``

• One of the fastest-growing segments of beverage

alcohol

• Grown to 82.5m nine-litre cases in 6 years (742.5m

litres)

• 90% of sales are off-premise and less than 1% of

sales via the ecommerce channel

• Over 50% of current consumers add alcohol to their

hard seltzers and of these over 30% add vodka

• Over half of consumers surveyed drink hard seltzer

regularly –at least once a week.

• More consumers switched from spirits (43%) to hard

seltzers than from wine (31%)

Copyright 2020 – The IWSR. Not to be reproduced or resold without permission from the IWSR.

The rise of hard seltzers in the US

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

200 000

2014 2015 2016 2017 2018 2019p

Mixed Drinks Sales – US, 2014-2019p

Hard Seltzer Other Mixed Drinks

Hard seltzers are the driving force behind mixed drinks in the US

Vo

lum

e –

‘000s

9L C

ase

sIWSR defines mixed drinks as all RTDs, FABs, FMBs, ready-to-drink

43% market

share


White Claw now controls over 50% of the hard seltzer category by volume

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

2014 2015 2016 2017 2018 2019p

Hard Seltzer Category by Volume, 2014-2019(p)

White Claw Truly Others(p) Preliminary

2019 % Share

White Claw: 52%

Truly: 26%

Others: 22%

Vo

lum

e –

‘000s

9L C

ase

s



Canned, flavorful fizz is king across all beverage

Hemp Seltzer Sparkling Coffee & Tea KombuchaSparkling Water & Soda

Spirit-Based Sparkling Wine-Based SparklingMalt-Based Seltzer

Digital engagement


• Instagrammable drinks

• Social media viral campaigns

• Influencer marketing

Digital trends


Are you Instagram ready?

#ShimmerCocktail

#PurpleDrinks

#DrinkArt

#Mixology #InstaRum

#GinfluencerCopyright 2020 – The IWSR – Not to be reproduced or resold without permission from the IWSR.

Ecommerce

Key trends


The IWSR forecasts that by 2024, the ecommerce channel will be worth $45.5bn

in value

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2018 2019 (p) 2020 2021 2022 2023 2024 (f)

Valu

e (

US$ m

illio

ns)

Year

Value of the Ecommerce Channel (Across 10 Markets)

Markets include: Australia, Brazil, China, France, Germany, Italy,

Japan, Spain, UK, USA

Growth Rate

Growth %

2017 – 2018:

14%

Growth %

2018 – 2019:

15%

CAGR

2019 – 2024:

17%

US$45.5bn

US$20.7bn


Ecommerce market value and growth – Ten core markets

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

China France United States United

Kingdom

Japan Australia Brazil Germany Italy Spain

Year-

on

-year

gro

wth

(%

)

US$ m

illio

ns

Beverage alcohol ecommerce: market value and growth

Online value 2018 2018 growth on 2017

Source: IWSR analysis based on retailer and industry in-market interviews, company reports, trade press, and other publicly available information.

7,824



Global and local perspective

Beverage alcohol ecommerce is

a growth channel and will

outpace the total trade, forecast

to be worth $45.5bn by 2024.

Estimated at $7.8bn USD in 2018,

China’s drinks ecommerce channel

is worth at least 3x more than that

of any other focus country.

Internet penetration and the state

of the wider ecommerce

landscape are key considerations

when prioritising markets.

Ecommerce key trends

Portfolio choices

Shifting local expectations

about what can be bought

online are affecting category-

by-category development.

The success of the Johnnie Walker

Gamer of Thrones collaboration

and its use of Amazon as its route

to market, the dominance of

Cognac over imported spirits in

China, and the emergence of

Amazon-only brands, provide

useful lessons for brand owners.

Knowing the consumer

A significant portion of

consumers are willing to pay

more for web purchases.

Greater convenience is the most

persuasive factor in virtually every

market. Consider also how

packaging and services tie in with

key gifting occasions.

Partnerships

Choose your partner carefully.

Mid-tier brands can find

champions in online service-

oriented category specialists.

Etailers’ key asset is the ability to

combine customer and sales data.

Brand owners should make use of

this, but also beware of its potential

to inform the competition –

especially as etailers begin to field

their own brands.

Coronavirus

• Impact on travel retail?

• Impact on-premise?

• Boost ecommerce sales?

• Hurt China domestic

consumption?


What can we learn from the US?


51Copyright 2019 – The IWSR – For client use only. Not to be reproduced or resold without permission from the IWSR.Exec SummaryTOTAL US

On-premise trends in the US

51

US Cocktail Landscape

• A Rebirth of the Classics

• Fizz – Hard Seltzers, Spritz and Spirit + Soda

Flavours

• Spicy, smoky, bitter and herbal

Trends to watch

• Cutting the Sugar

• Low ABV

• Hard Seltzer and Canned Cocktails


City v city US bartender

insight


Thank you

Any questions?

For more information contact [email protected] or visit www.theiwsr.com


global spirits market trends - vinexpo paris 2020 · global spirits market trends - vinexpo paris...

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