On the rocks: Falling alcohol consumption and strong import competition water down industry growth

The Spirit Manufacturing industry has faced mixed trading conditions over the past five years. The industry faces strong external competition, with imports expected to account for almost one-third of domestic demand in 2018-19. In addition, Australian spirit manufacturers derive a large portion of revenue from bottling and blending overproof spirits imported from overseas. The premiumisation of consumer tastes and stronger demand for ready-to-serve cocktail products have benefited the industry over the past five years. Industry revenue is expected to grow at an annualised 1.9% over the five years through 2018-19, to total $1.9 billion, including a rise of 0.7% in the current year, with declining demand from pubs, bars and nightclubs constraining industry performance...read more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • Bottling and blending imported overproof spirits represents a large share of industry revenue
  • The entry of small independent distillers has increased the industry’s labour intensity
  • Consumer preferences are shifting towards premium products, boosting profit margins
  • Industry Report - Industry Key Buyers Chapter

    The Spirit Manufacturing industry exhibits a moderate level of market share concentration. The industry is dominated by Diageo Australia, Independent Distillers (Asahi Holdings), Coca-Cola Amatil and Carlton & United Breweries, which are estimated to account for over 50% of industry revenue in 2018-19. Over the past five years, the entry of smaller scale manufacturers has reduced market share concentration. The major players have generally had modest revenue growth, compounding this trend. Many smaller spirit manufacturers that produce a growing range of products have entered the industry, aiming to benefit from the evolving tastes of Australian consumers. Mar...purchase to read more.

    Additional Insights for the Spirit Manufacturing Industry

    IBISWorld has determined the most important Key Success Factors for the Spirit Manufacturing are:

  • Guaranteed supply of key inputs
  • Product is sold at high profile outlets
  • Development of new products
  • IBISWorld analysts also discuss how external factors such as Per capita alcohol consumption and Demand from liquor wholesaling in the Spirit Manufacturing industry impact industry performance..

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    What's in this report

    What is the Spirit Manufacturing Industry?

    The industry purchases ingredients such as grapes, sugar and malt, then ferments and distils these to produce spirit beverages including vodka, gin, whisky and liqueurs. Industry participants also blend overproof spirits imported from overseas. Operators package these products and sell them to alcoholic drink wholesalers and retailers. While the industry makes fortified spirits, it does not produce fortified wines.

    Industry Products
  • Liqueurs
  • Spirits
  • RTDs
  • Other alcoholic beverages
  • Industry Activities
  • Fortified spirit
  • Liqueur
  • Manufacturing spirit-based mixed drinks
  • Potable spirit
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Per capita alcohol consumption
  • Demand from liquor wholesaling
  • Real household discretionary income
  • Demand from pubs, bars and nightclubs
  • Trade-weighted index

  • Current Performance
  • Revenue under pressure
  • Mixed growth
  • Products and brands
  • Trade and premiumisation
  • Chart: Revenue Growth

  • Industry Outlook
  • Industry growth
  • International trade
  • Product trends
  • Tasmanian whisky
  • Table: Spirit Manufacturing Industry Revenue Outlook

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

  • Supply Chains
    Key Buying Industries
  • Liquor Wholesaling
  • Liquor Retailing
  • Pubs, Bars and Nightclubs
  • Hotels and Resorts
  • Motels

  • Key Selling Industries
  • Glass and Glass Product Manufacturing
  • Grain Growing
  • Grape Growing
  • Printing
  • Sugar Manufacturing

  • Products & Services
  • RTDs
  • Spirits
  • Liqueurs
  • Other alcoholic beverages
  • Chart: Spirit Manufacturing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Retailers
  • Liquor wholesalers
  • Hospitality industries
  • Export markets
  • Chart: Major Market Segmentation for the Spirit Manufacturing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Wages
  • Depreciation
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Spirit Manufacturing

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Spirit Manufacturing Industry

  • Industry Globalization
    Diageo Australia Limited, Coca-Cola Amatil Limited, Asahi Holdings (Australia) Pty Ltd,
  • Table: Diageo Australia Limited - financial performance
  • Table: Coca-Cola Amatil Limited - financial performance
  • Table: Asahi Holdings (Australia) Pty Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Spirit Manufacturing 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 Manufacturing Industry
  • 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
  • A tax based on volume rather than value. In the case of spirits, it is based on the volume of alcohol contained in the beverage.
  • Ready-To-Drink (Rtd)
  • A term used to describe packaged drinks that are sold in single servings, e.g. pre-mixed spirits with non-alcoholic beverages, such as rum and cola.
  • Ready-To-Serve (Rts)
  • Bottled pre-mixed cocktail beverages.
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    Why buy this report?

    IBISWorld’s Spirit Manufacturing market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    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 Manufacturing:
    • 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 of 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 Manufacturing 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 Manufacturing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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