Ken Research announced its latest publication on, “Flavored Alcoholic Beverages Consumption Volume and Growth Forecast to 2021-West Europe”; offer insights on the changing trends and key issues within theWest European Flavored Alcoholic Beverages market. The publication includes an insightful analysis of volume (M liters) and growth (Y-o-Y) trends, consumer behavior, packaging trends, leading players and distribution trends withinWest European flavored alcoholic beverages market. The analysis of the aforementioned trends has been done across sixteen individual countries in West Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Republic of Ireland, Spain, Sweden, Switzerland, and United Kingdom.
Brief Overview of the Flavored Alcoholic Beverages Market in West Europe
A further segmentation of the alcoholic drinks category provides for a newly innovated, popular sub-category of alcoholic drinks i.e. Flavored Alcoholic Beverages (FAB). These are mixtures of low-alcohol spirit. Vodka and Rum are often considered under this category. However they may also be made with neutral alcohol. Sometimes they are also called ‘alcopops’; these are fruit based drinks, pre-mixed versions of classic cocktails, wine coolers, Japanese Chu-Hi products and alcoholic ginger beer.
Over the years, Flavored Alcoholic Beverages has emerged as one of the most popular and highly demanded drink in the world. The rise of FABs has been mostly concentrated in regions with traditional choice of beer which includes Western Europe, apart from US and Australia. In the face of challenge presented by non-alcoholic drinks in Western Europe, FABs are providing some solace by driving volume growth in the alcoholic drinks market, through its increased sales on account of its low-alcohol content and its trendy nature that is appealing the consumers especially the young ones, helped by the strategic marketing techniques for its sales.
Presently, in the light of its special features, the market for FABs is posting positive growth rates mainly on account of positive volume CAGR during 2010-2015, when majority of the alcoholic drinks are posting negative growth rates due to declines in sales volume. Looking at the competitive landscape, the market is characterized by fierce competition due to the presence of various international and domestic producers, with increasing influx of international brands. However, domestic brands are dominating the market in most of the cases. Also, off-trade sales channels have been performing better than on-trade channel. Hypermarkets and supermarkets, grocery retailers are dominating the distribution channels.
Key Factors Driving Growth in West European Flavored Alcoholic Beverages Market
Changing consumer tastes and preferences along with supplier-side business activities, is shaping the growth path of the Flavored Alcoholic Beverages market in West Europe and the persistence of these trends in coming future is expected to play a key role in the future growth of the market. Health awareness among consumers has shifted the preference of drinkers towards low-alcohol content beverages, which has decreased the demand for high-alcohol content drinks shifting the consumer base towards FABs. Demand for FABs has also been boosted by its sudden popularity among young population desiring for new, light and trendy beverages. Aging population has also been shifting from high-alcohol to low-alcohol content drinks as per their old-age needs.
From supply side, manufacturing companies are also responding in line with the increased consumer demands so as to reap maximum benefits from it. They are focusing on innovation in the FABs segment as well as paying attention to their marketing strategies especially targeting the young population seeing their craze for the Flavored Alcoholic Beverages.
Positive economic outlook for the European countries also attracts various domestic and international companies to invest in the FABs market. This however has caused intense competition among market players affecting their profit margins negatively. Thus, fierce competition may pose threats to future growth of the market.
Also the govt. regulations targeted to curb the underage drinking through high taxation schemes may limit the long run growth of the FABs; posing another serious threat to the FABs market in future as revenues from taxation also incentivises the govt. to introduce higher taxes.
West European Flavored Alcoholic Beverages Market Prospects
In the review period (2010-2015), due to high taxes, market maturity and health awareness, the market for alcoholic drinks have seen negative growth rates especially on account of decline in sales volume. Despite this, the market for FABs have seen increase in sales volume, hence positive volume CAGR, reasons being increased demand for FABs on account of drinkers’ inclination towards drinks with low-alcohol content, health awareness among consumers decreasing demand for high alcohol content drinks, sudden popularity among young population because of it being light and trendy. Manufacturers are also focus on strategic advertising targeting the young ones, along with efficient competitive pricing.
Over the forecast period (2016-2021), the West European FABs market is expected to show positive sales volume growth rates and drive the market growth of the alcoholic drinks facing falling consumption demands. The factors leading to increased demand for FABs are anticipated to continue in coming years as well.
However, the long run success of the FABs market may be put to limit due to increasing government intervention in the market in future to curb underage drinking through heavy taxation, which also raises heavy revenue for govt. Thus, government regulations may pose serious threat to the growth of the FABs market in future.
- Republic of Ireland
- United Kingdom.
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Ankur Gupta, Head Marketing & Communications