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Premium spirits to defy Covid pressures

Published:  05 August, 2020

Premium-and-above spirits are forecasted to increase their global volume market share to 13% by 2024 as consumers continue to search for “authenticity and status”, according to the IWSR.

Despite the ongoing pressures of the global pandemic, the IWSR is predicting that the trend for premium and super premium spirits, including cocktails and high-end sipping spirits, will continue to grow their market share over the next few years.

This ongoing trend towards quality over quantity is expected at a global level.

According to the IWSR, China is the world’s largest premium-and-above market for wine and spirits by value, with the US close behind.

In both countries, premium-and-above brands are forecast to increase their volume market share by approximately one percentage point a year between 2019 and 2024, as the growth of premiumisation trend continues apace.

“From mastery of the ecommerce channel and at-home consumption, to futureproofing the production and distribution chain, to aligning with lifestyle choices and consumer experiences, beverage alcohol brands are wise to identify and understand macro trends taking place right now in the industry, to ensure longevity and success post-Covid,” said Mark Meek, CEO of IWSR.

The predictions were made as part of the IWSR’s latest deep dive into the world of alcohol worldwide in its Global Trends Report 2020, which outlines some of the “far-reaching impact” on alcohol consumption wrought by Covid-19.

While Covid-19 restricts the movement of people and socialising in restaurants and bars, it seems that many of the trends that were around pre-Covid are set to continue – with a few set to be accelerated by the pandemic.

One of these is an emerging reaction against globalisation.

“Local products and experiences – accelerated by travel restrictions and closed borders during the pandemic – will continue to gain popularity as consumers rally behind symbolic and job-sustaining producers,” the report read.

The IWSR also expects the uptick in portable and convenient beverages like canned wine and RTDs to continue, particularly among the younger generations, which have formed new drinking habits during lockdown.

Spirits categories that are expected to continue to ride the premium wave include tequila (which has grown 15% year-on-year between 2015-2019), and spirit aperitifs, which are expected to recover well from the Covid-19 driven slump in the on-trade.

Healthy, organic and low and no alternatives are also all expected to continue their forward march.

The IWSR names the UK as one of the key markets where consumer-and state-led shifts toward health and sustainability are likely to continue in the wake of the Covid-19 pandemic.