ID: MRFR/F-B & N/5769-CR | January 2019 | Region: Global | 167 pages
Market Research Future (MRFR) confirms that the Luxury Wines and Spirits Market is all set to capture a valuation of USD 93,550.0 Mn by 2023. The market size can also blossom at a rate of 5.22% between 2018 and 2023 (assessment period).
The COVID-19 outbreak and especially the subsequent lockdown have had a brutal impact on the luxury wines and spirits industry, with the temporary shutdown of several manufacturing facilities and weakened consumer demand for luxury drinks. The luxury spirits market has witnessed devastating effects of the SARS-CoV-2 pandemic, and therefore, players are now more focused on bolstering their supply chains and accelerating their operations to develop a wider range of products, to once again capture the attention of the consumers. Also, with the lockdown being lifted up across countries and the novel coronavirus seemingly under control, the demand for luxury wines and spirits has been picking up traction, resulting in market growth.
Improving Living Standards & Preference for Luxury Goods to Foster Growth
With the rapidly improving living standards of consumers worldwide, preference for premium luxury goods has soared as well. Consumption of luxury products is vastly dependent on occasions like parties, social gatherings and marriages, and the growing number of the latter is proving to be favorable for the global market.
Luxury premium brands sense the opportunity and are adopting target based social media measures to spark the interest of young tech-savvy consumers that seek more personalization, higher value for money, as well as integrated digital access. The massive surge in the number of netizens and the sharp internet penetration are some of the major growth rendering factors in the luxury wines and spirits market.
Emerging Countries to Present Lucrative Opportunities
Developing countries are offering a host of lucrative opportunities to luxury wines and spirits manufacturers, in view of the surging acceptance and consumption of the same. The increased preference for vintage wines, especially during special events also propels market expansion across these countries.
Another key opportunity can be the mounting influence of social media on Gen Z and millennials, encouraging them to spending generously on premium goods.
Strict Government Rules to Hinder Market Growth
One of the major restraints for the global market can be the strict government regulations and rules that restrict alcohol sales across a few countries. Wines and spirits can also observe slow consumer demand owing to the fact that their excess consumption can result in diabetes, heart disease, high blood pressure and stroke.
Wine Market to Make Significant Progress
The main types of luxury wines as well as spirits in the global market are tequila, whiskey, wine, rum, brandy, gin, vodka, and others. The luxury wine market generates the highest revenue out of all the types, given the colossal customer base and the low alcohol content in them compared to other drinks. The most popular wines are red and white, owing to high availability and the health benefits associated with these types.
Food Retail Segment Emerges a Hit in Developing Regions
Some of the key distribution channels studied in the report are food service and food retail. The food retail segment is in the lead owing to the surging number of retail shops across emerging markets and the provision of one stop solution gaining popularity among consumers. Also, since retail stores provide an extensive range of diverse products at affordable rates, consumers are more likely to opt for these distribution channels over other means.
Asia Pacific Clinches the Leading Spot
APAC, with the biggest share of 39.07%, is the most lucrative market for luxury wines and spirits, with India and China contributing significantly to the said growth. Mounting number of small-sized wineries combined with the advancements in wine quality in China are some of the key reasons for the market’s strong growth. Singapore, India, Australia and Hong Kong are a few other promising markets in the region, taking into account the rising per capita income, surging influence of the western culture, and the soaring consumer interest in luxury items.
Europe to Secure the Second Position
Europe makes up close to 26.50% of the global market for luxury wines & spirits, with the lead taken by Germany, France and the U.K. The European market benefits from the strong economic condition, significant affordability, and the massive demand for premium goods. The luxury wines and spirits industry in the region is quite mature with sharp penetration, dominated largely by companies like Bacardi, Campari, Diageo and Pernod Richard. Evolving lifestyle, considering the substantial increase in disposable income, also propel the market growth for luxury wines and spirits in the region.
North America to Stand Third in the Global Market
The North American market forms 23.67% of the total share, despite the sales of luxury wines and spirits market observing slowdown. However, the sales are expected to pick up in the coming years in view of the rising premiumization trend in Canada as well as Mexico and the US. Products’ premium pricing has boosted the profit margins for the players, while the growing number of pubs and bars in the region that attract hoards of young people also help bolster the market size.
Players Focus on Innovation and Product Launch
Several vendors take up a variety of strategies including partnerships, collaboration and merger to further establish themselves in the global industry. The fast growing consumption of various luxury wines and spirits in view of rising per capita income is prompting players to focus more on product innovations and launch to not only bolster brand recognition but also gain a wider customer base in the intensely competitive industry.
The key points covered in the luxury wine industry overview are the top challenges, barriers and drivers affecting the market size. MRFR critically assesses the wine and spirits industry share, taking into account the base year, projected period as well as the size during the given period. The market study also comprises some of the key developments post the COVID-19 outbreak in the market. Apart from comprehensive market segmentation, the report also throws light on the latest business scenario covering the expected as well as the historical value, in terms of volume and value, technological developments, and the top factors inducing market growth. Besides, the well-known vendors and the top strategies followed by them to stay relevant in the industry are also profiled in the MRFR report.
Scope of the Report
The scope of the report covers spirits industry analysis, focusing on the type and distribution channels as well as the key regions. The various types of luxury drinks, along with the latest trends in each of the sub-segments are also listed in the MRFR report.
By Distribution Channel
Frequently Asked Questions (FAQ) :
Global luxury wines and spirits market is projected to grow at approximately 5.22% CAGR during the assessment period (2018-2023).
Global luxury wines and spirits market is estimated to reach a valuation of approx. USD 93,550.0 MN by the end of 2023.
Rise in number of high net worth individuals, growth in the luxury travel industry, and increased spending on lifestyle are major tailwinds pushing the growth of the global luxury wines and spirits market.
Asia Pacific holds the largest share in the global luxury wines and spirits market, followed by Europe and North America, respectively.
Diageo PLC, Bacardi & Company Limited, Bayadera Group, LVMH Moet Hennessy Louis Vuitton S.E, Campari-Milano S.p.A, Thai Beverage PLC, Hitejinro Co., Ltd., Beam Suntory Inc., Brown-Forman Corporation, The Edrington Group Limited, Pernod Ricard SA, and William Grant & Sons Limited, are some of the top players operating in the global luxury wines and spirits market.
Global luxury wines and spirits market is projected to witness a CAGR of 5.22% during the forecast period (2018-2023) and reach a valuation of USD 93, 500 Mn. The market continues to witness a tremendous growth owing to the expansion of consumer base worldwide. At the same time, new product launches and product innovation has made a significant influence in driving the popularity of luxury wines and spirits. The market is expected to remain highly dynamic during the forecast period.
Global alcohol consumption has continued to grow at a sound pace, more than 80,800 hectoliters of luxury wines & spirits were sold in 2017. Being a luxury category, wines and spirits are commonly linked attributes such as pricy, extravagant, aesthetically pleasing, symbolic and privilege. Demand for such beverages has also increased emerging countries such as China, Brazil and India as the standard of living continues to improve in these countries. The growing number of high net worth individuals (HNWIs) in these countries who desire to maintain an extravagant lifestyle is reflecting favorably on the market. Untapped opportunities in emerging market prompting collaborations and investments in joint-ventures.
Growth of the luxury travel industry is also making a positive impact on the market. Luxury wines and spirits are a special segment in luxury aircrafts, cruises, and hotel. Today, more and more consumers are aspiring for such luxurious experience. However, the implementation of stringent regulations by the government and drifting preferences of consumers towards non-alcoholic beverages are some of determinants that may undermine market’s potential in the forthcoming years. In addition, the substantial rise in number of health-conscious consumers who are inclined towards non-alcoholic beverages may impact sales.
Segmental analysis of the global luxury wines & spirits market is conducted on the basis of type, distribution channel and region.
By type, the market has been segmented into wine, whisky, rum, brandy, vodka, gin, tequila and others. Of these, the wine segment is accounted for the dominant share of the market in 2017. The segment is currently valued at over USD 43,000 Mn and is projected to exhibit a health growth over 2023. Red wine, white wine, and rosé wine are the most popular wines variants. Consumption of red wine to a limited extent is also considered healthy. Moreover, wine has been symbolic in many ways in various parts of the world. Increased consumption in region such APAC and LatAm also substantiates the segment’s growth.
By distribution channel, the market has been segmented into food retail and food service. The later will continue to outperform the former throughout the assessment period. In 2017, the food service segment stood at valuation of USD 38,536.9 Mn and is projected to witness a healthy growth over the next couple of years. Food service typically refers to the distribution of luxury wines and spirits to hotels, restaurants, luxury ships, aircrafts, etc.
On the basis of region, the market has been segmented into North America, Asia Pacific, Europe and rest of the world (RoW). Asia-Pacific accounts for the maximum share of global luxury wines and spirits market. During the forecast period, the market in APAC is projected to witness a compound annual growth rate of 6.60%. China and India are making significant contributions to the growth of the market in APAC. Factors such as rising per capita disposable income, increasing westernization and growing aspirational consumption among consumers are heavily linked with the increased consumption of luxury alcoholic-beverage. China’s winemaking industry has been thriving as well as gained significant commercial mileage in recent years. There is a substantial rise in number boutiques wineries in china, which is a positive sign for market players operating in the region.
Key players operating in the global luxury wines & spirits market include Pernod Ricard SA, Brown-Forman Corporation, Diageo PLC, Bacardi & Company Limited, Thai Beverage PLC, Campari-Milano S.p.A, The Edrington Group Limited, Bayadera Group, LVMH Moet Hennessy Louis Vuitton S.E, William Grant & Sons Limited, Hitejinro Co., Ltd and Beam Suntory Inc.
Increasing high net worth individuals (HNWIs) population across the globe is paving the way for lucrative opportunities for the market players
Major key players listed in the luxury wines & spirits market include Pernod Ricard SA (France), Brown-Forman Corporation (France), Diageo PLC (UK), Bacardi & Company Limited (Bermuda), Thai Beverage PLC (Thailand), Davide Campari - Milano S.p.A. (Italy), The Edrington Group Limited (UK), Bayadera Group (Ukraine), LVMH Moët Hennessy Louis Vuitton S.E. (France), William Grant & Sons Limited (UK), Hitejinro Co., Ltd (South Korea), and Beam Suntory Inc. (South Korea). The global luxury wines & spirits market is highly competitive in nature owing to the penetration of existing alcoholic beverage producers in the luxury segment. Prominent vendors are adopting new product launch and mergers & acquisitions as their strategy to gain a higher competitive edge over the other market players. Moreover, market players are also focusing on increasing their volume sales in both developing and developed countries due to the surging global demand.
LVMH Moët Hennessy Louis Vuitton S.E. accounted for the highest market share in the global luxury wines & spirits market. It accounted for a major share of 41.6% in the year 2017. The company offers a wide range of wines and spirits, including luxury wines and spirits. The company has a wide range of luxury wines and spirits sold under various brand names including Dom Pérignon and Krug. LVMH continues to expand its business portfolio through several acquisitions in Europe and other parts of the globe. The company also owns a number of vineyards with high production and skilled labor.
Diageo PLC garnered a share of 14.6% of the overall global luxury wines & spirits market. It has gained global presence by offering luxury wines and spirits to consumers across Europe, Turkey, North America, Asia-Pacific, Africa, Latin America and Caribbean. In order to diversify its business and gain strong hold over the Indian market, the company acquired United Spirits Limited, a prominent India-based spirits company. It has also opened several retail stores such as the experiential retail store in Madrid under Johnnie Walker brand. These expansion initiatives, strategic acquisitions, and partnerships have enabled the company to boost its sale across several regions of the world.
Pernod Ricard SA also holds a prominent position in the global market with a market share of 11.4% in 2017. The company’s growth can be attributed to it strong research and development, diverse product portfolio, and extensive geographic reach. The company is also inclined towards increasing production capacity and vineyards for in-sourced ingredients. It is expected that the company will continue with several partnerships and acquisitions to increase its footprint across the globe.
The other players active in the global luxury wines & spirits market are also striving to gain a prominent position in the market by focusing on partnerships, strategic acquisitions, product launch, and packaging. For instance, Brown-Forman Corporation partnered with Bacardi & Company Limited to distribute its products in the UK market.