The global premium spirit market size to be valued at USD 235.74 billion by 2027 and is expected to grow at a compound annual growth rate (CAGR) of 10.3% during the forecast period. The growing popularity of high-end drinks among the millennial population has been fueling market growth across the world. The sales of cocktails, such as margaritas, martinis, and manhattans, have gained remarkable traction in the developed economies of North America and Europe. Furthermore, growing popularity of the cocktail culture in developing nations, such as China and India, is expected to promote the scope of premium spirits. Over the past few years, the growth of the high-end alcohol segment has been outpacing the growth of the overall segment and hence pushing the overall consumption of alcohol over the world.
In 2019, Distilled Spirits Council has reported that both the revenue and volume of spirits have been setting a record for ninth consecutive years in the U.S., which has increased the share in the global alcoholic beverage market. The growth of this segment is majorly attributed to the rising demand for diverse, innovative, and authentic high-end alcoholic beverages among the millennials. Premiumization has become a growing trend in the alcohol industry. Most of the categories in the industry are going through substantial premiumization. Particularly, tequila has been gaining traction among consumers over the years. Over the past few years, with the changing lifestyle, consumers are choosing quality over quantity.
Like the food industry, consumers of the beverage industry are also seeking clarity and sustainable manufacturing practices. This trend has been widening the opportunities for the firms to offer products at premium price points. Furthermore, health-conscious consumers are increasingly shifting towards low-alcohol or no-alcohol beverages from traditional alcoholic beverages, which may hamper the growth of the market in the upcoming years.
In recent years, millennials made up a sizable portion of alcohol consumers, and it is projected to continue over the forecast period. The generation has a sizable amount of purchasing power and is over the legal drinking age (LDA). In addition, premium spirits are made from natural ingredients and are of better quality than regular liquor. These factors are expected to drive the market forward over the forecast period.
The premium spirits market is primarily driven by an increase in disposable income. Customers with high disposable income have access to the best quality spirits. Customers are paying more for high-quality, premium products because they are becoming more conscious of their drinking habits. In addition, the increasing trend of visiting pubs and bars among the youth is expected to drive the market forward.
However, rising government regulations on alcohol, rising health consciousness among consumers, and increasing shifts in consumer preferences toward low or no-alcohol drinks over traditional alcoholic ones, are the main factors acting as restraints and are expected to hinder the market growth.
On-trade accounted for more than 55.0% share of the global revenue in 2019. This distribution channel includes restaurants, bars, clubs, cafes, and hotels. The professionals working at the on-trade outlets, such as bartenders and waiters, play a crucial role in the sales process of the products.
The off-trade distribution channel is expected to register the fastest CAGR of 10.4% from 2020 to 2027 in terms of revenue. An increasing number of large supermarket chains, along with their in-store promotions in the developing nations, are expected to fuel the growth of the distribution channel in the upcoming years. The specialist alcohol retailers account for a significant share of the off-trade sales of the product. In addition, the growing adoption of e-commerce is a key factor fueling the growth of this distribution channel, especially in the U.S. and the U.K. The COVID 19 outbreak and imposition of nationwide lockdown in several countries have pushed the off-trade sales of premium spirits significantly.
Vodka held the largest revenue share of more than 25.0% in 2019. The availability of a wide range of vodka, including flavored and gluten-free, has boosted the sales of the product across the world. Ketel One Vodka (Diageo), Tito's Vodka, Chase Vodka, Chopin, Grey Goose, Van Gogh Vodka, Belvedere, Absolut Vodka, Stolichnaya, Three Olives', Zyr Vodka, Crystal Head, and Cîroc are high-end vodka brands gaining popularity across the globe owing to their fine quality. Companies have been introducing innovative flavors to their products, including marmalade, oak-smoked, coconut, berries, citrus, vanilla, and rhubarb, to attract a wider range of consumers.
The tequila segment expected to register the fastest CAGR of 11.6% from 2020 to 2027 in terms of revenue. Tequila has been witnessing remarkable popularity among the consumers. Growing cocktail culture has been boosting the demand for tequila worldwide, especially in the U.S. and Mexico. Unlike brandy or whiskey, where high-end products are well established, tequila is relatively new to offering premium options, which enables the tequila manufacturers to explore the industry. Tequila has been shifting from conventional consumption as ‘party shot’ to luxury cocktails, such as Margarita and Tequila Sunrise. This growing trend is expected to encourage the producers to invest in premium tequilas.
Asia Pacific held the largest volume share of over 40.0% in 2019. Rising use of social media and increasing health awareness have been fueling the demand for superior quality spirits in the region. Consumers are seeking low alcohol content and authentic drinks.
Growing bar culture in the developing nations, including China, India, and Thailand, has been fueling the regional market growth. Furthermore, increasing disposable income, along with economic growth, is a key factor in boosting the capacity to consume superior quality and luxury spirits in the region.
China, India, Hong Kong, Australia, New Zealand, and South Korea are the prominent markets of the region. China accounted for the largest share in the Asia Pacific market as a result of increased sales volume of high-end spirits at the domestic level. In addition, a growing middle-class population and an increasing number of urban dual-income families in India are expected to fuel the growth of the market in the nation in the near future.
The global market is highly competitive with the presence of numerous global level players. The companies have been witnessing significant growth of their premium brands over the years. For instance, Diageo’s premium-and-above brands were the best performers in the developed markets in 2018. These brands’ ‘Reserve’ collection grew by 11% in 2018-2019. Similarly, Pernod Ricard, Rémy Cointreau, and Suntory Group are also witnessing considerable growth in the high-end product segments, and hence focusing on premiumization. Some of the prominent players in the premium spirit market include:
TITO’S HANDMADE VODKA
HITEJINRO CO., LTD
Brown Forman Corporation
Tanduay Distillers, Inc.
Allied Blenders and Distillers Pvt. Ltd. (ABD)
Guizhou Moutai Wine Co., Ltd.
Alliance Global Group, Inc. (Emperador)
In June 2023, Pernod Ricard a leading brand from France, announced an agreement with Stock Spirits Group on the sale of the Clan Campbell Blended Scotch whisky brand to adapt to the evolving needs of its consumers and provide greater opportunities for premiumization.
In May 2023, Brown-Forman Corporation acquired the Diplomático Rum brand and related assets from Distillers United Group S.L. (Spain). The company aims to expand its super-premium rum portfolio and meet the preferences of global premium spirits consumers.
In May 2023, Brown-Forman Corporation announced to expand its Casa Herradura tequila distillery in Jalisco, Mexico for USD 200 million owing to increasing global demand for tequila which is the fastest-growing spirits category globally by value in the super-premium price segment.
In May 2023, Pernod Ricard’s venture capital fund, Convivialité Ventures, acquired shares in ecoSPIRITS, for the premium wine and spirits industry to strengthen ecoSPIRITS’ leadership position and accelerate its R&D program.
In March 2023, Diageo acquired Don Papa Rum a premium-aged, single-island rum a distilled spirit made from sugarcane and its byproducts from the Philippines. The acquisition aims to further strengthen its strategy of acquiring high-growth brands with attractive margins.
In November 2022, Allied Blenders and Distillers (ABD) Ltd. launched its premium offer X&O Barrel Premium Whisky, a premium blend of the best Scotch. The aim of the product launch was to expand its market nationally.
Market size value in 2020
USD 135.76 billion
Revenue forecast in 2027
USD 235.74 billion
CAGR of 10.3% from 2020 to 2027
Market demand in 2020
2,009.5 million liters
Volume forecast in 2027
3,109.4 million liters
CAGR of 8.0% from 2020 to 2027
Base year for estimation
2016 - 2018
2020 - 2027
Revenue in USD million, volume in million liters and CAGR from 2020 to 2027
Revenue and volume forecast, company ranking, competitive landscape, growth factors, and trends
Product, distribution channel, region
North America; Europe; Asia Pacific; Central & South America; Middle East & Africa
U.S.; Germany; U.K.; China; India; Brazil; South Africa
Key companies profiled
Diageo; Pernod Ricard; TITO’S HANDMADE VODKA; HITEJINRO CO., LTD; Bacardi Limited; Tanduay Distillers, Inc.; Allied Blenders and Distillers Pvt. Ltd. (ABD); Guizhou Moutai Wine Co., Ltd.; Alliance Global Group, Inc. (Emperador); ROUST; Brown Forman Corporation
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This report forecasts revenue and volume growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global premium spirit market report on the basis of product, distribution channel, and region:
Product Outlook (Volume, Million Liters; Revenue, USD Million, 2016 - 2027)
Distribution Channel Outlook (Volume, Million Liters; Revenue, USD Million, 2016 - 2027)
Regional Outlook (Volume, Million Liters; Revenue, USD Million, 2016 - 2027)
Central & South America
Middle East & Africa
b. The global premium spirit market size was estimated at USD 107.74 billion in 2019 and is expected to reach USD 135.76 billion in 2020.
b. The global premium spirit market is expected to grow at a compound annual growth rate of 10.3% from 2020 to 2027 to reach USD 235.74 billion by 2027.
b. Asia Pacific dominated the premium spirit market with a share of 40.5% in 2019. This is attributable to the rising demand for low alcohol content and authentic drinks coupled with growing bar culture in the developing nations of the region.
b. Some key players operating in the premium spirit market include Diageo, Pernod Ricard, TITOâ€™S HANDMADE VODKA, HITEJINRO CO., LTD, Bacardi Limited, Tanduay Distillers, Inc., Allied Blenders and Distillers Pvt. Ltd. (ABD), Guizhou Moutai Wine Co., Ltd., Brown Forman Corporation, Alliance Global Group, Inc. (Emperador), and ROUST.
b. Key factors that are driving the market growth include the growing popularity of high-end drinks among the millennial population, rising cocktail culture in emerging economies, and the launch of innovative products.
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