Research in Focus - Asia-Pacific: The Most Valuable Spirits Market
Asia-Pacific is the number one region in the world in value terms, according to The IWSR’s Global Retail Value of Spirits Report.
Over the last five years the value of all spirits rose by +9.9% compound annual growth rate (CAGR) in Asia-Pacific; spirits volumes grew by +6.8% CAGR over the same period.
In comparison, North America’s CAGR between 2004 and 2009 was 5.7% in value terms and 2.2% in volume terms. A more significant difference is seen when looking at 2009 growth rates: in value terms, North America grew just 1.6%, while Asia-Pacific grew 14.8%. North America, and the US in particular, was hit hard by the economic crisis, whereas China, a key market in the Asia-Pacific region, remained fairly unscathed. China has now overtaken the US in value terms. The US market grew just 1.6% in value terms in 2009.
The growth of Asia-Pacific has been driven mainly by China, the top market in the region. China is three times the value of second-place market, Japan, and is the fastest-growing market in the region. Despite the economic crisis sweeping the world in 2009, the value of the Chinese market grew a further 21.9%.
Local spirits in China grew strongly in 2009; sales of premium baijiu have been thriving over the last five years. Packaging has improved greatly and is often first choice for consumers over premium imported spirits.
Led by the Chinese market, Asia-Pacific managed to defy the global trends and maintain overall growth during the global economic crisis. Although imported spirits only grew marginally, it is local spirits that saw the most growth. Many consumers switched from imported to local spirits during the crisis, a trend that was seen in many countries across the world.
Premiumisation has been a hot topic in recent years, with some markets gaining value despite losing volumes as consumers trade up. This trend reversed temporarily in many markets during the crisis, but there are signs that the trend will return and consumers are beginning to trade up once again.
In Asia-Pacific, standard spirits saw the smallest growth over the last five years. Standard spirits suffered in many markets as consumers traded down to value products or made less frequent purchases. Super-premium-and-above qualities have enjoyed the highest CAGR-rate growth over the last five years in terms of volume. In value terms, ultra-premium-and-above qualities are the fastest-growing categories.
The picture revealed in the Global Retail Value of Spirits Report indicates Asia-Pacific is not only the area with the highest value sales, but clearly shows the region has experienced impressive growth in recent years. It looks set to continue its strong growth and development in future years.
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