Industry Analysis & Industry Trends
Australia imports most of the spirits it consumes. As a result, the Spirit Manufacturing industry only supplies 39.9% of domestic demand. For many products, some degree of transformation occurs domestically, particularly in the case of ready-to-drink (RTD) beverages. The primary spirit manufactured domestically is rum, made from sugar cane, while spirits that are mixed or blended locally are also considered as manufactured in Australia. Many industry participants are engaged in transforming high-proof spirits to low-proof products such as RTDs and liqueurs. As the manufacturing of Australian spirits has developed, particularly with gin and whisky, industry revenue has grown at a compound annual rate of 2.5% over the five years through 2013-14. Growth over 2013-14 of 2.9%... purchase to read more
Industry Report - Starting a New Business Chapter
The production process for spirits is highly capital-intensive and economies of scale are substantial. This has the effect of allowing larger producers to produce at low costs, and channel revenue into advertising and maintaining brand image. It also allows larger producers to sell their product at a lower cost than smaller producers. Therefore, to compete successfully on price, producers need large-scale operations that are associated with significant capital investment.
At the same time, opportunities exist to compete on the basis of quality rather than price, which would allow for small-scale production as long as consumers are willing to pay a premium for the product... purchase to read more