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Alcoholic Drinks Market Overview
The global alcoholic drinks market generated revenue of $1,198.6 billion in 2014, and it is further projected to advance at a CAGR of 3.2% during the forecast period (2015–2020). Owing to the surging consumption of alcoholic drinks at social gatherings and occasions, an increasing inclination toward flavored alcoholic drinks, and an augmenting consumption of premium, the market is witnessing rapid growth across the globe.
Based on segment, the beer, cider, and flavored alcoholic beverages (FAB) category held the dominant share in the alcoholic drinks market in 2014. The low alcohol concentration as compared to spirits and wines, make them the preferred alcoholic drink worldwide.
In 2014, the U.S. was globally the largest consumer of alcoholic drinks, with a 15.9% share in terms of value, whereas China was the largest consumer in terms of volume, with a 29.1% share. By 2020, China is expected to become the largest market for alcoholic drinks in terms of both value and volume. Additionally, in 2014, China became the largest market globally for beers, ciders, and FABs, with a 15.8% share in the alcoholic drinks market, in terms of volume.
Alcohol Drinks Market Dynamics
The declining on-site consumption of alcoholic beverages in most of the developed countries is a notable trend in the global market. The increasing tax on dining and drinking is discouraging consumers to opt for on-premise consumption. Although minimum alcohol purchase age bar for on-site is low in several countries, it is not having much impact on the consumption pattern through this distribution channel.
The increasing inclination toward flavored liquors and liqueurs is propelling the growth of the alcoholic drinks market. Several alcoholic drinks, such as spirits, wines, ciders, and beers, are available in various flavors. Consumers who have newly become eligible for the purchase of alcoholic drinks are the most prospective buyers of flavored alcoholic beverages. They are not much brand and taste loyal and want varieties in their drinks, which also makes them an important market segment. Furthermore, spirits have been the most popular among flavored alcoholic drinks.
The addition of flavors in beer moderated the declining global sales of the segment in 2012. Alcoholic drinks are available in soft and strong flavors, ranging from fruit to lime and blueberry. The introduction of flavors offers growth opportunities to the alcoholic drinks market.
Alcoholic Drinks Market Competitive Landscape
The overall threat of substitutes in the alcoholic drinks market is low. The substitute products for alcoholic drinks include fruit juices and soft drinks. They are indirect substitutes for the market, as they pose a moderate degree of competition to alcoholic drinks with lower alcohol content, such as beer.
However, the cost of switching to these substitutes is low, which increases their threat to the alcoholic drinks market. The propensity of switching, however, is notably low, as a smaller number of consumers prefer to switch to juice and soft drinks, due to the price difference between them.
Additionally, companies in the alcoholic drinks market have been launching campaigns for promoting their alcoholic drink brands. Heineken Holdings N.V. is among the leading companies which is actively engaged in promotional campaigns. In 2015, Anheuser Busch-inBev offered to buy SABMiller in a deal worth $107 billion, where Molson Coors is likely to purchase the remaining interest as part of the deal.
Some of the key players operating in the global alcoholic drinks market are Kirin Holdings Company Limited, Tsingtao Brewery Company Limited, Beijing Yanjing Brewery Company Limited, Bacardi Limited, Anheuser Busch-inBev, Heineken Holdings N.V., Diageo PLC, Olvi PLC, Carlsberg A/S, Miller Coors, SABMiller PLC, and Grupo Modelo.
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