The spirits industry is on the path to recovery following a hard 2009 during which many markets were affected by the credit crunch, according to The IWSR’s Forecast Report 2010-2015. Several countries and categories are returning to stability or growth in 2010, but the time and speed of recovery will vary considerably depending on local circumstances.

The global spirits market will continue to grow, albeit at a more moderate rate than in the five years leading up to 2009 – a CAGR of 1.4% is predicted between 2009 and 2015, down from 2.4% between 2004 and 2009. 

India and China are expected to be the two fastest-growing markets for spirits globally and India will overtake Russia to become the second-largest spirits market globally in 2013, at least on registered taxed sales. All spirits categories will show growth in India in the forecast period, with vodka predicted to show the highest percentage growth: 12% between 2009 and 2015. In China, Scotch whisky will lead growth, up by 7.8% to reach 2.8m cases in 2015. The US is predicted to be the third fastest-growing market worldwide until 2015; the vodka market alone is likely to gain over 12m cases.

Most spirits categories will see more moderate growth until 2015 than they have in the last five years. This is largely due to the cautious spending behaviour adopted by consumers after the economic recession took its toll on many markets. Rum and whisk(e)y are expected to gain share of the overall spirits market, while vodka’s share will decline.

Whisk(e)y is expected to see the highest increase in percentage terms, gaining around 100m cases over the next five years. The booming market in India is leading the growth with Indian molasses-based whisky. Scotch consumption will grow at a rate of 1.2% until 2015, compared to a 2004-2009 CAGR of 1%. As consumers are switching to Scotch from other categories such as aniseed, beer and even wine, and larger bottle sizes are growing in popularity, France is forecast to show the strongest volume growth in Scotch over the next five years.  

Due to its growing popularity among young people and its fashionable image in many key markets, rum will continue to increase at a similar CAGR as that of the previous five-year period. After a difficult year in 2009, more premium products are expected to return to growth in the long term.  

The global vodka market will grow at a CAGR of 0.7%, returning to gradual growth after falling marginally between 2004 and 2009 (-0.1%). Consumption of vodka in Germany is expected to outgrow that in the UK, while India is likely to overtake both Germany and the UK to become one of the top five markets for vodka worldwide by 2015. Despite repeated claims to the contrary, the vodka market in the US continues to develop well and growth is expected to be strong in the future. By 2015, more than every third bottle (35.1%) of spirits sold in the US will be vodka.

In spirits generally, the super-premium-and-above price segments are likely to see the highest increases in percentage terms, as consumers will be more confident and able to trade up once again. The recovery of the on-premise markets should also help the growth of this segment.

The IWSR forecasts those 53 markets that have been identified as the most significant to the wine and spirits industry. Market information is gained by The IWSR’s researchers visiting around 120 markets each year, and meeting local producers, distributors and industry experts.