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Flavoured spirits sector to grow to US$50.77 billion by 2029
The flavoured spirits sector, which grew to a value of US$16.03 billion in 2021, has been forecast to be valued at US$50.77 billion by 2029.
The findings from a new report, put together by analysts at Data Bridge Market Research, revealed that the category is due an upspike and is expected to grow at a compound annual growth rate (CAGR) of 15.50% during the forecast period of 2022-2029.
The research, asserts that flavoured spirits – a distilled beverage that has been flavoured with natural or artificial flavours either added before or after distillation – are a growing category that is frequently used in cocktails, mixed drinks and shooters.
It identified that infused flavours in flavoured spirits are typically extracted from fruits, spices, wild herbs, or raw nuts and often include cherry-flavoured spirits and maple-flavoured spirits, bringing interest and complexity to certain spirits.
According to the report, over the last decade, the flavoured spirits category has been one of the top export items in both developed and developing countries.
The report stated: “With increased demand for grab-and-go convenience that fits into today’s consumers’ busy yet healthy lifestyles, pre-mixed or RTD alcoholic drinks are becoming more popular, potentially increasing demand for flavoured spirits”.
The analysis identified how “canned wine, cocktails, and hard seltzers are becoming popular, directly aligning with the on-the-go culture. Furthermore, to increase sales, alcohol providers focus on direct-to-consumer offerings via online retail” and noted that “these elements will continue to support the future prospects of flavoured spirits”.
The report findings revealed how, “as the economy in various countries remains strong, consumer interest in high-end flavoured spirits and more expensive drinks has grown, fuelled in part by easy access to information and willingness to spend on desired products [and] as a result, demand for flavoured spirits has increased.
The report data pinpointed how whisky has “remained a popular alcoholic beverage among many drinkers over the years, securing a strong position in premium mixers” and explained that this is “expected to boost the growth” of the flavoured spirits category along with the demand for flavoured spirits also being “boosted by strong sales of high-end and super premium products”.
Last month, Pernod Ricard acquired a majority stake in peanut butter flavoured American whiskey brand Skrewball, an acquisition that also comes off the back of Pernod’s launch of Jameson Orange into the flavoured whiskey category last year. According to the drinks giant, the appeal of flavoured spirits is down to the category being broad and so ideal for reaching a wide range of consumers, beyond traditional spirits lovers.
According to analysts putting down the data, “aside from looking for healthier alternatives, an increasing number of consumers are looking for brands that can meet their needs by providing sustainable sourcing and social responsibility. These factors are not only increasing demand for functional and fusion beverages, but they are also causing a dynamic revolution in the alcoholic beverage industry”. For instance, “companies are aiming to increase the production of no- or low-alcohol drinks, necessitating a strong focus on ingredient innovation” and, meanwhile, “manufacturers are developing high-quality ingredients with low impurities and clean flavour, which will continue to be critical in gaining a distinct competitive advantage”.
Speaking about entering the flavoured spirits category recently, Hoxton Spirits founder and CEO Gerry Calabrese also told db: “I have always had the idea of creating the first brand to have flavoured SKU’s in multiple spirit categories” and pointed out that flavoured varietals “make all spirits categories accessible to all drinkers” and used terms such as “macerations [and] infusions [and] botanicals” to retain the premium cues for the category.
In a drill down of the data, the report also highlighted how “Asia-Pacific dominates” the flavoured spirits sector and pointed out that “one of the driving factors for the region’s alcoholic beverage market growth has been a shift in consumer preferences away from traditional alcohol and toward imported alcohol”.
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