Shots fired: Distillers are expected to benefit from opportunities in international markets

In recent years, operators in the Spirit Production industry have saddled with volatile exchange rates and changing consumer preferences. Economic conditions in Continental Europe, exacerbated by a strong pound, caused export demand to contract at the start of the past five-year period. However, the boom in the popularity of whisky and gin helped to partially offset the burden of falling exports on revenue in 2014-15. Following the EU referendum in 2016-17, the fall in the value of the pound stimulated exports, benefiting UK distillers. While strong exports are expected to support revenue growth of 4.3% in 2018-19, subdued performance earlier in the period means that revenue is only expected to grow at a modest compound annual rate of 1.1%...read more.

Industry Statistics & Market Size
Revenue
£5.6bn
Annual Growth 14-19
1.1%
Forecast Growth 19-24
Profit
Employment
27,606
Businesses
438

Industry Threats & Opportunities

  • Demand has been fuelled by craft gin and consumers seeking a wider portfolio of flavours
  • Micro distilleries have entered the industry to capture a share of the craft spirits market
  • Consumers that value quality over quantity are expected to drive growth
  • Industry Report - Starting a New Business Chapter

    The Spirit Production industry has high barriers to entry. Manufacturing is a capital-intensive process that requires substantial investment. Relative to whisky production, distillers must have the financial capacity to operate during the lengthy period between the start of manufacturing and final distribution. Whisky must be matured for several years, meaning distillers do not benefit from a quick turnaround in sales revenue. The barriers to entering the gin market are comparatively lower, given that gin production is a less time-consuming process. Whisky can be produced over a short time period, albeit at the expense of quality which is considered a key competitive basis.Prospective distillers must also comply with extensive regulation prior to manufacturing can begin. Pot...purchase to read more.

    Additional Insights for the Spirit Production Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Spirit Production Industry are

  • Effective product promotion
  • Economies of scale
  • Having a wide and expanding product range
  • IBISWorld analysts also discuss how external factors such as Real effective exchange rate and Demand from supermarkets in the Spirit Production industry impact industry performance..

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    What's in this report

    What is the Spirit Production Industry?

    Operators within this industry are concerned with the end-to-end process of spirits production with particular focus on distilling, bottling and trading with retailers and wholesalers. Independent marketing and packaging of spirits are omitted operations within the industry unless included within the complete manufacturing process. Beverages produced through alcoholic fermentation are not considered within this industry; these include beer, cider and wine.

    Industry Products
  • Blended whisky
  • Single malt whisky
  • Gin
  • Other products
  • Vodka
  • Industry Activities
  • Distilling and bottling whisky
  • Distilling and bottling gin
  • Distilling and bottling vodka
  • Development of flavoured spirits
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Real effective exchange rate
  • Demand from supermarkets
  • Real household disposable income
  • Alcohol consumption per capita
  • Health consciousness

  • Current Performance
  • Export performance
  • Health awareness
  • Gin-gin
  • Chart: Revenue Growth

  • Industry Outlook
  • Quality over quantity
  • Operating conditions
  • Trade flow
  • Table: Spirit Production Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Spirit Production Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Alcoholic Beverage Wholesaling
  • Supermarkets
  • Off-Licences
  • Nightclubs
  • Pubs & Bars

  • Key Selling Industries
  • Hollow Glass Manufacturing
  • Malt Manufacturing
  • Sugar Production

  • Products & Services
  • Blended whisky
  • Gin
  • Single malt whisky
  • Vodka
  • Other products
  • Chart: Spirit Production Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Off trade
  • On trade
  • Chart: Major Market Segmentation for the Spirit Production Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesMarketingDepreciationTaxationOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Spirit Production

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Spirit Production Industry

  • Industry Globalization
    Diageo plc, Chivas Brothers Ltd, The Edrington Group Ltd,
  • Table: Diageo plc - financial performance
  • Table: Chivas Brothers Ltd - financial performance
  • Table: The Edrington Group Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Spirit Production Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Spirit Production Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Exports (2010-2024)
  • Imports (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Bourbon
  • A type of US whiskey made using corn.
  • London Gin
  • A label that can be applied to high-quality gins made using specified processes and ingredients.
  • Small Batch Whisky
  • These are premium whiskies that are distilled in small quantities by mixing the contents of selected barrels.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Spirit Production market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Spirit Production:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Spirit Production market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Spirit Production, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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