The global market for spirits exceeded 2,495 million cases in 1998 and is estimated to grow to 2,498 million cases in 1999. The 1998 figure was 1.1% behind the previous year’s figures and 1.6% behind the 1995 peak, according to a new report by leading beverage consultants, Canadean Limited. Whilst demand for vodka and rum remained solid, and the demand for tequila continued, the Scotch whisky and Cognac categories suffered major setbacks.
1998 saw the Scotch whisky category suffer one of its most difficult trading years showing an 11.3% decline in consumption, mainly due to huge falls in Asia. Taiwan (-46.8%) and South Korea (-46.0%) were the worst affected markets as countries in the region felt the full force of their country’s collapsing economies. Malaysia, China and Vietnam also saw declines of more than 25%. However, there were varied performances in the category from country to country. Within the Scotch deluxe sector the two largest brands, Chivas Regal and Johnnie Walker Black Label posted declines of 11.3% and 14.3% respectively during 1998, mainly due to the Asian economic crisis. Two major brands in the Scotch standard sector lost one million cases between them in 1998, Johnnie Walker Red Label, the world’s leading brand in the sector showed a 6.3% drop and Passport’s volumes suffered a 25% decrease. The Scotch malt sector, however, continued to thrive with volumes up by over 10%.
The Cognac sector was also badly hit by the Asian economic crisis where it was more dependent than other sectors. Across Asia, during 1998, there was a decline somewhere in the region of half a million cases, worst hit was Japan, where sales fell by 35%.
Vodka remains as the biggest of all international spirits but since 1994 the category has lost over 65 million cases, mainly due to the decline of sales in Russia, however it still remains as the leading market in the sector. Other East European markets have also been affected and in particular, Poland and Belarus. The U.S.A. has, by far, the largest vodka market outside of Eastern Europe. Whilst vodka volumes are huge, the majority are mostly regional. Stolichnaya is the world’s leading spirit brand but remains regional being produced in no fewer than 800 distilleries throughout Russia. Smirnoff, the third largest brand in the category, is the leading truly international brand, although over 42% of sales are in the U.S.A.
The ever-increasing Tequila category continues to thrive and is dominated by the Cuervo and Sauza brands.
Pre-mixed spirits have grown by 120% since 1992 to reach sales of almost 18 million cases, and today Australia leads the world in this category.
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If the global spirits market is viewed from a company prospective rather than category some of the more successful companies are Brown-Forman with Jack Daniels showing a further 8.1% increase and providing over half of the company’s operating income.
Pernod Ricard’s anis/pastis brands remain stable but in terms of volumes Havana Club, Jameson and Clan Campbell have all shown good growth levels.
Canadean’s report, “Global Spirits Trends”, is unrivalled in its analysis of the global demand for spirits during the period 1990 to 1998. Each year provides detailed coverage of product performance at global, country and brand level. Volume information is provided in terms of both litre and 9 litre case equivalents, accompanied by tables reflecting performance in terms of percentage shares and percentage change. This year’s report also contains estimated data for 1999.
Reports on “The Global Gin Market” and “Tequila” are also currently available.
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