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The Alcohol Space – A Review

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The Alcoholic beverage market is huge and worth over $1 trillion dollars with spirits being the fastest growing market segment. A number of contributing factors have been the reason to this surge in growth for example higher female participation, changing taste preference etc. With these changes in the market what opportunities and challenges face the major players in the industry?

 

In recent years the major players in the Alco/Bev space have seen considerable increase through driving growth across major multiple categories. A likely opportunity will be organic or inorganic growth through acquisition, an opportunity many of the large players have seen with a number of acquisitions taking place over the last year. The emerging markets space looks like a major opportunity with the growth of middle class consumers in the space and therefore more disposable income corresponding to the growth of spirits in particular. While spirits vary considerably in consumption dependent on geography particularly the premium segment looks well positioned for continued long term growth.

 

Despite the number of opportunities there are still some key challenges the major players will face moving forward. One recurring problem is government regulation. The Alco/Bev market is a target for regulation and tax which impact sales. A clear example of this is the recent crackdown in China of conspicuous consumption and with the emergence of the digital space; brands are having less control on communicating messages around brands.

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