A significant shift has been seen in Singapore, in the consumption of whisky, consumers are now more fascinated for single malt Scotch whisky now, switching from blended Scotch whisky. The young consumers of Singapore witnessed a noticeable lack in the brand loyalty of whisky. It is found that they are more attracted towards the innovation and are willing to try new brands. One of the major reasons behind this significant shift is the increase in disposable income among young adults. The spirit consumption of Singaporean has increased by almost 83%. According to a report published by the World Health Organization in their Global Alcohol Report (2014), the consumption of spirits in Singapore in 2010 accounted for 15% of the total alcohol consumed in litres of pure alcohol. In 2018, the average volume per person in the market for Spirits Industry amounts to 0.8 litres and the average price per unit amounts to US$35.97.

Consumer Trends of Singapore Spirits Industry:

As the Singaporean consumers spending on alcoholic beverages has been continuously increasing due to the rising disposable incomes. It is expected that in the near future, the sale will be boosted more with the opening of more restaurants and pubs. It is the fastest growing cocktail culture boosted sales market of spirits ranging from bourbon (an inexpensive spirit to use in cocktails), it is more popular with white rum, tequila and artisanal gin. Moreover, the rise in the tourist industry of Singapore made the efforts of the company to reach the need of the foreign consumer with the introduction of more premium quality products. Various products were imported from several countries to seek to diversify their product portfolios as per the companies aspect. Also, the culture of the cocktail has been greatly supported by the trend of food pairing, this is no longer about pairing food with just wine.

A boom has been seen in the customized cocktail bars, innovative mixes from bartenders are the major attraction of the consumer and also the consumers are keenly interested in giving feedback and choices to bartenders, when they visit such new concept bars. Several retailers from off-trade and on-trade also obtained benefit from the consumers who have the willingness to spend, particularly when the drinking culture and social scene embracing on the young and affluent Singaporeans. The largest consumer segment of the spirits industry is the female consumers and is the key target with more flavoured drinks that are lighter for them. Also, the significant participation has been seen by the men in the growing cocktail culture, before this, the chauvinistic attitude wouldn’t allow men to hold a cocktail glass but this is no longer the case.

Distribution Channels of the Spirits Industry:

The major distribution channel of the alcoholic drinks is supermarkets/ hypermarkets, on trade businesses, and specialist retailers. Leading distribution channel of the alcoholic beverages is the on-trade sale. There are no such aggregate figures is available for spirits industry products, such as gin, rum, vodka, and whisky which are listed in separate categories. But from the last decade or so a blistering growth in volumes has been seen in spirits. It is expected the volume of the market of the spirits reach amount to 4.7ML by 2021. The market share of accounted for 59.8% for on-trade distribution and 17.3% for the supermarkets/ hypermarkets.

Rest of the market of the spirits industry belong to the specialist retailers and other channels such as department stores including duty-free stores. The sales of the alcoholic drinks increased at foodservice outlets, where food is as important as the alcoholic drink. Alcoholic beverages manufacturers are eagerly seeking to establish collaborations to open up a new segment with the consumer of foodservice players. Cafes are now increasingly offering more alcoholic beverage products. The revenue of the spirits industry market is expected to grow by 4.4% annually (CAGR 2018-2021) which is amounted to US$158m in 2018. Per person revenue generated US$27.26 in 2018, in relation to the total population.

Competition and Challenges for the Spirits Industry in Singapore:

Developing an online presence is the necessity for the companies. The tradition of the distribution of wines, beers, and spirits is steadfast. Many brands are developing their own brand or they can go into a partnership with the online distributors to get their name out there. Consumers are seeking a brand which is gender-neutral and are looking for their products because drinking and its story is no longer a man’s game now. Hefty of taxes and several layers of margin is the major reason for the high retail prices of the spirits. Singapore is the most expensive places to buy spirits because of the high taxes policy on alcoholic industry beverages. In 2017, Gin has seen a strong growth driven by the growing availability and popularity of craft gin in the on-trade channel. Increased premiumisation and booming cocktail culture in gin allowed consumers to gain a greater appreciation for craft gin.

Opportunities for the Spirits Industry in the Singaporean Market:

Singapore is the growing hub for the broader Southeast Asian market for international wines and spirits industry products. Singapore remains at the forefront for the growth and innovation in the alcohol industry as high disposable income and an increasingly exquisite palate boosting the premium market among the rising middle class and a growing appreciation of premium products despite strict drinking regulations

As the cocktail culture in Singapore is tremendously growing, the recorded total volume compounded annual growth rate of 3% over the period 2015-2020, it is expected that the spirits industry reach 5 million litres in 2020. The demands of the products of the spirits industry will be rise more in the future due to the rising sophistication of drinkers in Singapore. The consumers will trade down to lower price points as per the expectation but whisky and such spirits industry products price differentiation among the more premium variants are less pronounced, the impact will be lower.

 

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Tags: Alcohol Industry, Alcoholic Beverages, Beer Industry, Cocktail Bars, Craft Driven, market research, Singapore, Singapore Market Research, Singapore Wine Industry, Spirits Industry