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Alcoholic Drinks Continue to Make Gains in Emerging Markets

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Alcoholic Drinks Continue to Make Gains in Emerging Markets

Alcoholic Drinks Continue to Make Gains in Emerging Markets
April 11
13:15 2012

As in 2011, emerging markets will continue to drive alcoholic drinks volume growth in 2012, according to Euromonitor. All four emerging market regions – Asia Pacific, Latin America, Eastern Europe and the Middle East and Africa- will see volumes increase. In the case of Asia Pacific and the Middle East and Africa, gains will exceed 5%. Beer will be the key growth category but spirits and wine will also contribute.

“Equally important is the fact that growth in the emerging markets is increasingly being driven by consumers trading up to more premium products as these economies continue to prosper,” explains Jeremy Cunnington, senior alcoholic drinks analyst at Euromonitor. “In all the emerging market regions, with the exception of the Middle East and Africa, premium lager will outperform the standard and economy segments, albeit from smaller bases. Meanwhile, growth of premium international spirits categories such as blended Scotch and cognac will also be driven by emerging market regions.”

In contrast, all three developed market regions – Western Europe, North America and Australasia – will see volumes decline, primarily due to the maturity of beer in these regions. However, these regions do offer opportunities for growth elsewhere in the industry. Wine, spirits and cider are all expected to do well in North America, while in Western Europe cider/perry and certain spirits categories such as vodka and rum will continue to grow.

Jeremy Cunnington continues: “In addition, products that suit changing consumer preferences, such as drinking at home rather than in on-trade establishments, will continue to do well, as witnessed by the strong performance of RTDs. In particular, this includes products such as ready-made cocktails which allow consumers to recreate the on-trade experience very closely at home.”

Despite tough economic conditions in North America and Western Europe, there will also continue to be opportunities to achieve value growth, as witnessed by the rapid progression of premium ‘craft’  beers in the US and super-premium gin in Spain.

“Regardless of the recovery of mature markets, the importance of emerging markets will only continue to rise, not just in terms of rapid volume gains but increasingly in value terms too. As more consumers in emerging markets are able to trade up, their retail value prospects can only accelerate. This can be seen in blended Scotch, for instance, where volume sales in emerging markets will actually exceed corresponding sales in mature markets by 2014. The balance of power is well and truly shifting in the global alcoholic drinks industry,” he concludes.

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