Industry Analysis & Industry Trends
The Spirit Production industry has performed well during the past five years. Challenging economic conditions and the long-term decline in spirit consumption have constrained domestic consumption of spirits for most of the period. However, this has been more than offset by a boom in demand for exports, particularly of Scotch whisky. Demand for whisky has soared in emerging markets across Asia, Latin America and Africa due to aspirational spending by young, affluent consumers. Exports are expected to slow in 2014-15 due to slowing growth in emerging markets and anti-extravagance measures in China but the industry should still record growth of 3.3%. During the five years through 2014-15, revenue is estimated to grow at a compound annual rate of 5.5% to reach £5.4 billion... purchase to read more
Industry Report - Starting a New Business Chapter
The barriers to entering the Spirit Production industry are high. Production is highly capital-intensive for all distilleries and substantial volume is needed to spread out these costs. The long interval between the start of production and the final product being available means that cash flows are not established for some time.
Some products can be distilled over shorter periods, but other whiskies can take over two years of ageing. Delayed revenue can deter players with smaller cash reserves from entering the market. Due to the relationship between ageing and quality, these players may still compete in the value-oriented segments of the market. Many small distilleries have been able to carve out a profitable niche by focusing on local markets and cheaper brands... purchase to read more