LONDON--(BUSINESS WIRE)--Technavio’s latest global alcohol ingredients market report highlights three key emerging trends predicted to impact market growth through 2020. Technavio defines an emerging trend as something that has potential for significant impact on the market and contributes to its growth or decline.
“Key findings of this market study indicate the global alcohol ingredients market will dominate Europe until 2020, accounting for over 37% of the overall revenue share. However, developing economies including those in APAC and Latin America show the strongest growth potential. Traditional and cultural influences play a significant role in shaping tastes and preferences in these markets. Therefore, manufacturers are expected to pay close attention to these factors for capitalizing the growing demand from this segment,” said Vijay Sarathi, one of Technavio’s lead industry analysts for food and beverages research.
“Between 2007 and 2012, the average per capita annual disposable income, specifically in the APAC region grew by around 18.87%, and it is further anticipated to reach close to 33% during the forecast period. With the increasing purchasing power of the middle-income consumer segment in developing regions, alcoholic beverages are becoming more affordable. This trend is likely to boost the overall alcohol ingredients market over the next four years,” added Vijay.
Technavio’s market research study identifies the following three emerging trends that are expected to propel the growth of the global alcohol ingredients market:
- Rise in number of wineries, breweries, and distilleries
- Product differentiation and innovation
- Evolving taste preferences
Rise in number of wineries, breweries, and distilleries
A rise in the number of wineries, breweries, and distilleries worldwide is a key factor contributing to the growth of the global alcoholic ingredients market. There is an increasing demand for locally produced alcoholic beverages, such as craft beer in the US and baijiu in China.
In 2014, there were close to 3,464 breweries in operation in the US, an increase of nearly 19% from that of 2013. In New York, US, the number of microbreweries increased from 40 in 2011 to around 104 in 2014. The state also has 57 new farm breweries and 100 new farm wineries. This increase in the number of manufacturing units helps vendors meet the growing demand for alcoholic drinks in the country and boost the demand for alcohol ingredients. Over the next four years, Technavio researchers anticipate a similar boom in local flavors and opening up of many new microbreweries in emerging market.
Product differentiation and innovation
Brand image and customer loyalty are the cornerstones of the alcohol market. While consumers stick to familiar brands, they also seek variety in terms of product offerings. Any differentiation in alcoholic beverages in regards to its basic composition is basically determined by alcohol ingredients.
Therefore vendors are investing heavily in augmenting their R&D capabilities, while focusing on broadening their product portfolios to include new flavors. To tap the lucrative market, multinational vendors are anticipated to increasingly collaborating with the local players to better understand consumer preferences.
A growing consumer base that seeks novelty in the alcoholic beverages provides the incentive to market players for innovating with new ingredients and it is likely to boost sales significantly over the next four years.
Evolving taste preferences
Manufacturers in the market are constantly striving to meet evolving taste preferences through product innovation, brand extension, and new brand introduction. In response to a growing interest in unique styles, manufacturers of artisanal flavors, and craft brewers are expected to flourish, while many new entrants continue to foray into the lucrative market.
In 2014, the retail value of craft beer in the US reached USD 19.6 billion, a growth of 22% from 2013. To stand apart from the competition, vendors experimented with unconventional flavors such as peanut butter and jelly, salmon, pickle, and apple pie, to name a few. Consumers are drawn to the novelty of brand and taste associated with such offerings, and it is anticipated to drive market growth through the 2020 period.
Browse related reports:
- USA Alcoholic Beverages Craft Beer Market 2015-2019
- Global Non-Alcoholic Beverages Energy Drinks Market 2015-2019
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