Marketing

Premium spirits outpaced standard market in 2011

The global growth of premium-and-above (premium, super-premium, ultra-premium, prestige and Cognac qualities extra and XO) spirits consumption outpaced that of non-premium spirits in 2011, thereby maintaining the strong volume growth seen in 2010 and surging ahead in terms of value, according to the International Wine & Spirit Research magazine.

The value of the premium spirits market grew by 21.0 per cent in 2011 versus 2010 while the value of non-premium grew by 11.9 per cent. In volume terms the premium spirits market increased by 7.7 per cent while non-premium spirits were up 6.0 per cent.

Following the onset of the global recession consumers in many markets became more price-sensitive and in many cases traded down to cheaper brands or categories or reduced the frequency of their premium purchases. In 2010 non-premium spirits outgrew premium in volume terms as general consumption recovered. Now that the global economy is once again in growth, premiumisation is returning – 7.8 million more cases of premium-and-above spirits were consumed in 2011 than in 2010.

In many markets tax increases have reduced the price gap between standard and premium brands, encouraging trading-up as well as squeezing out the low-priced segments, states IWSR. The premiumisation trend can also be attributed to consumers’ desire to drink less, but of better quality, while also thinking about the health implications of excessive drinking. They’re following the fashion trends of premium brands too.

Asia-Pacific is the fastest-growing region for premium spirits consumption in percentage terms as well as the second-largest in terms of volume growth – it increased by 1.9 million cases, with the strongest growth coming from the Baijiu category in China.
Global GDP grew 3.9 per cent in 2011, according to the IMF, with Asia demonstrating the fastest growth (7.8 per cent).
Premium spirits increased by 4.2 million cases in the Americas, the largest growth market. Key growth came from the vodka market in the US, where US whiskey, tequila and gin also saw strong increases.

In most spirits categories, premium segments grew faster than their non-premium counterparts. In categories such as gin, tequila, flavoured spirits and cane, the standard and low-priced segments declined, while the premium-and-above segments grew. Many of these categories are being revitalised by new premium brands entering the market.

 

The value of the premium spirits market grew by 21.0 per cent in 2011The value of the premium spirits market grew by 21.0 per cent in 2011

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