Industry Analysis & Industry Trends
The Distilleries industry managed to escape declines during and immediately after the economic downturn due to a consumer trend toward premiumization, or an increase in the consumption of high-grade liquor and spirits. Additionally, the increased popularity of cocktails over the five-year period resulted in more liquor consumption at on-premises drinking establishments. Although the industry remains highly concentrated, with brand loyalty and acquisitions maintaining the dominance of a few top players, the industry has also experienced an influx of small-scale craft distilleries. Overall, the Distilleries industry is expected to sustain its growth over the next five years, buouyed by continued improvements in consumer spending and greater demand for higher-margin craft spirits... purchase to read more
Industry Report - Industry Investment Chapter
Production of liquor for consumption is a highly capital intensive process. The majority of the distillation process is mechanized and requires very little labor from actual workers. As a result, over half of all companies have fewer than 20 employees. However, larger players, such as Diageo and Suntory Beam Inc., are vertically integrated into wholesaling and marketing. This drives up their labor costs considerably because they must pay additional workers, such as salesmen and marketers, to help brand, sell and distribute their products. On average, companies in this industry spend $0.55 on capital for every dollar they spend on labor.
Like all large-scale manufacturing, liquor production requires substantial amounts of machinery... purchase to read more