Analysis

Research in Focus - Alcoholic Drinks in 2014: Subdued, Uneven and Precarious

Most popular

What are Diageo's priorities for the years ahead?

Diageo Performance Trends 2014-2018 - results data

What can the spirits industry learn from Diageo?

Coca-Cola and packaging's ecommerce evolution

MORE

Volume growth for alcoholic drinks globally remains subdued for a second year running and, at merely 0.8% for 2014, last year is set to be amongst the three lowest over the past decade.

Beyond the usual Western European patient that ended the year flat lining, the Chinese slowdown – at just 1.2% - and Russia's on-going macro and geopolitical travails - culminating in a nigh-apocalyptic decline of 6% for 2014 - weigh heavily on the global landscape.

But, as the seemingly unstoppable emerging market engine begins to sputter, North America has shifted back into focus with total volume growth for the year. That said, at +1%, up from a poor 0.3% in 2013, the region is still some distance from the exuberance of its past.

Geographic diversification - or the lack thereof - remains one of the defining factors determining top-line success or failure. It is in this context that categories like Cognac and vodka have suffered disproportionately due to their over-reliance on a single market or region, with China and Russia respectively exerting their immense gravitational pull to drag their global growth rates lower.

With Cognac registering total volume growth of just 0.4 % and vodka declining by 5%, it was second-tier markets beyond their core strategic bastions that provided - or could yet provide - some respite. For example, Cognac’s belated shift of focus towards the US and mass market varietals has already planted the seeds of an American renaissance for a category otherwise trapped in a gilded cage of luxury and nouveau rich extravagance.

On the other hand, the on-going pivot towards brown spirits and selected varietals within the whisk(e)y stable underscore the still untapped opportunities even in otherwise terminally-mature markets.

Heritage, authenticity and craftsmanship solidified their position as key drivers for whisk(e)ys but some fared better than others. Bourbon, Irish and Japanese whiskeys – witnessing spectacular total volume rates of 5%, 8% and 7%, respectively - stole the limelight from Scotch, which was eclipsed in terms of innovation and relevance to the millennial demographic alongside key Scotch distillers’ over-optimistic assessment of the emerging market mantra.

There were winners and losers across all categories. In beer, beyond the ever-rising tide of craft offerings across the globe, Imported premium lager, ale and non-alcoholic variants proved to be the star performers at the same time that imported mid-priced lager suffered the most. Here, we can witness a reiteration of the relevance of polarisation, craftmanship, diversification and exoticism as the key drivers across the alcoholic drinks landscape.

Cider, which has been seemingly insulated by recessionary forces, macroeconomic volatility or even evolving drinking patterns, continued enjoying solid total volume growth of nearly 9% on a global level, as the western European core markets gradually take a back seat to the sky-rocketing North American success story.

Lastly, RTDs reiterated their dominant position over retreating, high-strength premixes. Even though Bud Lime-A-Rita’s explosive trajectory in the US got inevitably reacquainted with gravity, strong growth in Asia Pacific secured an overall healthy performance of 2.7% for the RTDs/high-strength premixes category.


Related Content

How is the future shaping up for Cognac and Brandy? - Research in Focus

How is the future shaping up for Cognac and Brandy? - Research in Focus...

What are the growth prospects like for international whisk(e)y? - Research in Focus

What are the growth prospects like for international whisk(e)y? - Research in Focus...

"The US is not all about Jameson and Absolut" for Pernod Ricard - Analysis...

"What people forget is this: The enemy is not here. We're all brewers" - just-drinks meets Anheuser-...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?