• The global spirits market is slowing down

• Premiumisation was a major theme of 2015, with craft spirits highly influential

• Flavour has also become the key to targeting Millennials, regardless of spirit type

The global spirits market is slowing down. Retail growth for 2015 is expected to rise slightly by volume (to 1.8%), following a poor showing in 2014, when it grew just 1.1% across key global markets according to Mintel estimates. It seems that the sector can no longer rely on huge growth from the BRIC regions, with all seeing economic headwinds, while markets in Europe and North America remain mature.

With global volumes almost flat, premiumisation was the main theme of the global spirits market in 2015. In developed, mature markets such as in Western Europe and North America, consumers are being influenced to choose quality spirits over quantity because of health concerns, worry about adverse alcohol effects, higher rates of disposable income, and greater interest and awareness in better quality food and drink.

Craft spirits also continue to rise in these more mature markets as consumers seek something more authentic and “special”. Despite currently being restricted mainly to North America and Europe, craft spirits accounted for one in every nine new global retail releases in both 2014 and 2015. In America, craft spirits are estimated to be worth around 2% of the total spirits market and will be aiming to replicate the success of craft beer, which now accounts for 11% of total US beer volumes, having had a significant head-start on craft spirits.

In emerging markets, premium spirits remain a means for middle- and upper-class consumers to publicly parade their wealth and social status. This helps explain why Brazil and Mexico both make it into the top-five Scotch importers, according to the latest 2015 half-year figures from the Scotch Whisky Association (SWA). However, in China the motivation to drink for status is becoming dissipated by the anti-extravagance socio-political climate.

Flavour is another recurrent theme of spirits innovation, and Mintel’s research shows that among younger, Millennial consumers in all regions, it has become – and continues to be - a significant purchase influencer for both dark spirits such as whiskies and white spirits like vodka and tequila.

Figure 1: Spirits/RTD, global market performance

Note: The size of each bubble represents the respective size of the market in volume

Source: IBGE, Economist Intelligence Unit, National Bureau of Statistics of China, United Nations COMTRADE database, DESA/UNSD, China Custom, Gira Conseil, Information Resources, Inc., BSI, The Nielsen Company, BSI, Rzeczpospolita, SAWIS (S A Wine Industry Information & Systems), Korea Alcohol & Liquor Industry Association, Korea Customs Service, TAPDK, General Statistics Office Of Vietnam/ Mintel

Please note: the market size data referenced in this report is current as of January 31, 2016