Industry Analysis & Industry Trends
The recession dampened double-digit growth in the Spirits Manufacturing industry, but premiumization and an expanding middle class in key world populations kept propelling revenue upward, despite slower sales in key markets in the five years to 2013. Additionally, rising spirits consumption in emerging markets and increasing demand for higher-value spirits in developed markets is expected to result in solid revenue growth during the next five years... read more
Starting a New Business
Overall, barriers to entry into this industry are high and steady. Barriers to entry include the high level of capital intensity, the long lead time for production (particularly for aged spirits), and the cost of legal compliance.
The production process for spirits is highly capital intensive and economies of scale are substantial. This results in larger producers having significant cost advantage over smaller producers, and channel revenue into advertising, enforcing trademarks, and maintaining their band image. Thus, producers have to be able to reach a sufficient scale before being able to enter the global spirits industry. This can be achieved, however, if producers are successful first in their domestic market before becoming multinational companies... read more