Below-cost selling: major feature in spirits – Euromonitor
The Irish Spirits Association has estimated that some 90% of the spirits produced here are exported with distribution to over 120 countries around the world.
Canada, Russia, South Africa and other EU Member States are key export territories for Irish spirits, with the US an especially strong export territory recording volume growth of over 20% in 2012.
South America is also pinpointed as an emerging export territory for Irish spirits, with demand from India and China also expected to continue increasing in the near future as demand increases and it’s becoming easier for Irish exporters to access consumers in these countries.
The majority of spirits consumed in Ireland are imported although whiskey constitutes one category in which domestic brands remain especially strong. Irish whiskey drinkers tend to be extremely loyal to their favourite brands as well as fiercely proud and supportive of local whiskey brands in general, states Euromonitor.
The diverse range of products on offer in spirits here combined with extremely high levels of brand loyalty ensured that the majority of brands and companies present in the category were able to maintain similar value shares and positions in 2013 to their competitive positions in 2012.
But Euromonitor notes that the average total unit price of spirits declined by 2% in current terms in 2013, with below-cost selling remaining a major feature of the category.
IDL remains the foremost spirits supplier in Ireland with a 31% volume share, according to Euromonitor’s Spirits in Ireland report.
Notable new product launches in 2013 focused mainly on premium brands, the area which presents the greatest opportunities for development in spirits here.
High-profile advertising campaigns for high-volume brands remains a major feature, with sports sponsorship one of the most prevalent ways of familiarising the general public with brand names. For instance The Hennessy Gold Cup is a major event in horse-racing,
Euromonitor expects spirits volumes to increase at a CAGR of 2% this year with positive growth expected as the economic conditions and consumer sentiment improve and spending rises.
That said, however, the rate of growth in spirits in Ireland is expected to slow down somewhat during the year, mainly as categories such as dark rum – which increased volumes by 12% in 2013 (rising to one million litres sold) and bitters, for instance, continue to mature following several years of phenomenal growth during the past year and into the forecast period.
