The spirits industry, like other industries, has been hit by the current global economic crisis. Euromonitor International's latest Global Briefing, "Global Opportunities for Leading Spirits Players despite the Economic Downturn", looks at how spirits companies are dealing with the current global conditions.

The briefing assesses the impact of the economic crisis on the global spirits corporate landscape, giving an overview of how the leading companies and brands performed in 2008. Jeremy Cunnington, Senior Alcoholic Drinks Analyst at Euromonitor International, investigates the strategies companies are and should be adopting to mitigate tough conditions, whilst still pursuing growth over the longer term.

Home comforts

With a number of economies in mature and emerging markets suffering, spirits companies have been focusing on their core markets. As these countries are their main revenue sources, this is a sensible policy. For example, in fiscal 2009, North America and Western Europe combined accounted for around 70% of both Pernod Ricard and Diageo's operating profit.

However, there are dangers of over-reliance on core markets at the expense of emerging markets, which offer the strongest long-term growth prospects. Bacardi and its eponymous rum brand are suffering poor volume performances due to their over-reliance on a limited number of core markets, such as the US, the UK and Mexico. Diageo is paying the price from withdrawing from Asia-Pacific at the start of the century following the Asian financial crisis when it cut back on developing its base in China and sold its local Indian whiskey division to focus resources on its North American and Western European markets. In realising its mistake, Diageo has had to spend increasingly large amounts on re-establishing itself both in India and China, which has significantly eaten into its operating profit for the region and means the company is still behind its rival, Pernod Ricard. The French company remained in both countries, continuing to invest in the region, and is now well placed, especially in India, to capitalise on the dynamic market.

· KEY FINDINGS
· Key Findings
· LATEST COMPANY PERFORMANCE
· Leading Global Spirits Companies
· Strong Economies in 2008 Still Meant Growth
· Leading Global Brands in 2008
· Brand Rankings Remain Unchanged
· Recession To Impact 2009 Performance
· COMPANIES GO BACK TO BASICS
· Retrenching An Easy But Poor Option
· Core Regions Dominate Leading Players' Operating Profits
· Core Markets Still Key for Volumes: Case Study - Ballantine's
· Core Markets Key - Diageo's Volumes
· Emerging Markets Offer Growth But at A Cost
· Diageo Shows the Folly of Too Much Retrenching
· EMERGING MARKETS STILL OFFER LONG-TERM OPPORTUNITIES
· Emerging Markets Key To Long-term Growth
· Emerging Markets Quick To Suffer, Quick To Bounce Back
· Leading Emerging Market Growth Drivers
· Mature Market Saturation Limits Growth
· International Companies' Regional Volume Split
· Many International Companies Weak in Emerging Markets
· Case Study: Targeted Expansion Brings Dynamic Growth
· Large Players Still Need Investment
· Smaller Companies Have Work To Do
· Some Key Aspects To Consider When Entering A New Market
· Other Key Aspects To Consider When Entering A New Market
· Emerging Market Entry Methods
· Case Study - Entrance Strategy in Russia for Blended Scotch
· CREDIT CRUNCH HITS M&A ACTIVITY
· Global Consolidation Continues
· Deals Reduce in Size As Money Becomes Tighter
· Too Much Debt Gives Companies Difficulties
· Over-extension Offers Opportunities
· FRAGMENTED CATEGORY PROVIDES LARGE M&A OPPORTUNITIES
· Still Many Gaps To Fill for International Companies
· Global Leaders Still Have Work To Do
· Recommendations for Diageo and Pernod Ricard
· Vital Time for Second-tier Companies
· Recommendation: Bacardi To Takeover Brown-forman
· Looking Good for Brown-forman and Campari
· Edrington Seizing Chance To Grow
· William Grant Seizing Chance To Grow
· CASE STUDY - EXPANSION OPPORTUNITIES WITH LIMITED RESOURCES
· Campari and William Grant Two Different Models
· Campari Strengthens Further by Acquisition of Wild Turkey
· Leveraging Growth in the US
· Campari Drives Brand Growth in Mature Market
· Wild Turkey Strengthens Campari's Australian Position
· Improving Distribution in Emerging Markets
· William Grant Opts For Less Acquisitive Strategy
· Third Party Brands Boosting Poor Performing Brands
· Stolichnaya Should Enhance Fast-growth US Brands
· Stolichnaya Distribution To Help in Other Markets
· Emerging Market Push Brings Rewards
· Key Learnings for Mid-sized Companies
· RECOMMENDATIONS
· Growth Still Possible in Difficult Times
· APPENDIX
· Major M&a Activity
· More Major M&a Activity
· Minor M&a Activity
· More Minor M&a Activity