Global Luxury Alcohol Market Analysis

The luxury alcohol market – which can be divided into the market for luxury wines and luxury spirits – is expected to see consistent and continued growth. The demand for luxury alcohol has transformed not just into the demand for the drink itself but rather for a certain kind of lifestyle that comes along with it. Luxury alcohol distinguishes a person from other social classes and affords them a certain level of status and celebrity.

The demand for wine among consumers is expected to be very high because of its increasing popularity. The taste, aroma, quality, and pricing of wine all account for its popularity. As for spirits, the demand is consistently high and may witness the fastest growth during the next forecast period.

Following the surge of the Covid-19 pandemic, the demand for luxury alcohol increased. While at home and in lockdown, the interest in cocktails, wine, and mixology went up. There was also a change in people’s philosophy and attitude towards life that led to the idea that life is fleeting and should be enjoyed while it can be. How better to enjoy life than with a luxury wine or spirit?  

Global Luxury Alcohol market was valued at around USD 773 billion in 2020 with decline of over 14% owing to COVID 19 pandemic and its subsequence’s. However, the demand has been recovering at a rapid pace and in the light of rapid vaccination around the world, it’s expected to restore to per COVID 19 level soon. Global Luxury Alcohol market is projected to become a trillion dollar industry in 2022.  

Interesting Facts about Luxury Alcohol Industry

• Taken in moderate quantity, alcohol has proved to be beneficial in protecting against heart diseases
• S. alone reported over 88 K deaths due to health issues caused by alcohol consumption per annum
• Global average per capita consumption of alcohol is around 6.5 litter
• Over 85% population in U.S. have had alcohol at least once in their lifetime
• China reported per capita consumption of alcohol among people who drink reached over 15 litres per annum

Growing Per Capita Consumption

The driving factors to the luxury alcohol market are significant. For almost any luxury market, the first and foremost factor is the general rise in per capita disposable incomes across the world. There is also a rise in the number of high net worth individuals and a growing elite class of people. This means that there is more money to be spent on luxury goods like alcohol.  

Alcohol has typically been marketed towards a population aged between 35 and 60. With a globally aging population, the target market is growing in size as well as in wealth because of higher disposable incomes. This is a huge cause of the rise in demand for luxury alcohol.  

Increasing Desire for Luxury Lifestyle

Another driving factor to the luxury alcohol market is the growth of the luxury travel industry, the luxury hotel industry, and the luxury restaurant industry. As the lifestyle of consumers has gone up, all of these demands become interlinked and feed one another. There is also a rise in the scale of celebrations. Weddings, parties, and international events have become grander and grander and led to the rise in demand for luxury alcohol.

One last factor to consider is the development of regions like Asia-Pacific and LAMEA. Fast-paced global urbanization and a rise in the tourism and vacation industry have meant that previously untapped geographical regions are now opening up.

Heavy Duties Imposed by Government to Arrest the Growth Rate

The biggest restraint to the luxury alcohol market is the addictive nature of alcohol. Because many people suffer from alcohol addiction, the sale and distribution of the products are highly regulated. Many governments also impose huge tax duties and make importing the product to their countries very difficult. Secondly, Alcohol is also age-restricted, and in most places, it is illegal for anyone under the age of 17 to consume alcohol, greatly reducing the target market size.

Spirits to Rule the Demand

Wines/Champagnes and Spirits are major types of luxury alcohol. Spirits dominated the luxury alcohol industry with largest chunk of total revenue generation in 2020. Vodka, Rum and Gin are some of the most popular types of spirits consumed by people and highly popular across the world. While, Wines/Champagnes are growing in popularity and likely to gain increased traction over the forecast period.

Online Distribution is Expected Grow in its Share over the Forecast Period

Wholesale, Retail, E-Commerce, and Others are some of the important distribution channels for luxury alcohol. Although retailers dominate the distribution channels, online distribution is expected to increase in its market share over the forecast period with rapid growth rate.    

Some of the important players operating in the global luxury alcohol industry include but not limited to Diageo, Pernod Ricard Bacardi, Brown-Forman, Thai Beverage Public Company Limited, Davide Campari-Milano S.p.A, Hitejinro Co.Ltd, Suntory Holdings Limited, Edrington, and LVMH Moët Hennessy - Louis Vuitton.