Premium Spirits Market Size, Share & Trends Analysis Report By Product Type (Vodka, Whiskey, Gin, Tequila, Rum, Brandy), By Distribution Channel (On-trade, Off-trade), By Region, And Segment Forecasts, 2024 - 2030

0Premium Spirits Market Size & Trends

The global premium spirits market size was estimated at USD 215.47 billion in 2023 and is expected to grow at a CAGR of 9.7% from 2024 to 2030. The market growth can be attributed to shifting consumer preferences for quality and authenticity in beverage choices. Moreover, the growing middle-class population, particularly in emerging markets like Asia Pacific and Africa, has led to increased disposable income, which enables consumers to opt for higher-priced, premium options. In addition, the expansion of e-commerce and online retail has made premium spirits more accessible, allowing consumers to explore and purchase a wide variety of brands and products with ease.

Another important factor driving the market for premium spirits is the focus on authenticity and provenance. Consumers are increasingly interested in the story behind the products they consume, including where and how the spirits are made. This has led to a growing preference for premium spirits that are produced using traditional methods, high-quality ingredients, and a strong emphasis on craftsmanship and heritage.

In recent years, millennials made up a sizable portion of alcohol consumers, and this trend 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 spirit market growth 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.

Market Concentration & Characteristics

Manufacturers in the premium spirits market are actively engaged in various initiatives to meet evolving consumer demands and market trends.

The premium spirit market is characterized by innovations in flavor profiles, limited-edition releases, and packaging design. Craft distilleries are increasingly innovating with unique ingredients, aging techniques, and barrel finishes. Brands are innovating through eco-friendly packaging, sustainable sourcing of ingredients, and carbon-neutral production processes. Premium spirits brands are leveraging technology through virtual tastings, NFT-based releases, and direct-to-consumer e-commerce platforms.

There has been significant M&A activity in the premium spirits space, driven by large multinational corporations acquiring smaller, niche brands to diversify their portfolios. Companies are targeting brands with strong regional presence or distinct product offerings (e.g., craft spirits or premium tequila) to strengthen their market positioning. Private equity firms have shown increased interest in the premium spirits market, betting on the growth of premiumization and consumer demand for luxury experiences.

Regulations surrounding distribution and sales (e.g., in the U.S., the three-tier system) significantly impact market access and growth strategies for premium spirits companies. Increasing regulatory scrutiny on health claims, labeling requirements, and advertising restrictions can influence product development and marketing strategies.Import/export regulations, including tariffs on premium spirits between key markets (e.g., U.S. and EU), impact pricing and profitability.

Premium spirits face competition from other alcoholic beverages, such as craft beers, premium wines, and ready-to-drink (RTD) cocktails that offer similar luxury experiences. The rise of non-alcoholic alternatives, particularly in the wellness and sober-curious movement, is creating new substitutes for traditional premium spirits. In markets where cannabis is legal, cannabis-infused beverages are emerging as potential substitutes for premium alcoholic beverages.

Premium spirits brands are consistently launching new products that cater to consumer demand for unique, limited-edition flavors and rare, aged spirits. Collaborative launches between premium spirits brands and other luxury brands or celebrities are becoming popular, helping to generate buzz and drive sales. Product launches are increasingly tied to experiential marketing, such as exclusive tasting events, VIP experiences, and partnerships with upscale venues.

Product Insights

Premium vodka accounted for a share of 33.30% in 2023. The availability of a wide range of vodkas, including flavored and gluten-free options, has boosted product sales across the globe. 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 some high-end vodka brands gaining popularity across the globe owing to their fine quality.

The premium tequila market is projected to grow at a CAGR of 12.4% from 2024 to 2030, owing to the increasing interest in tequila-based cocktails, with mixologists experimenting with flavors and infusions to create inventive drink offerings. Premium brands are capitalizing on shifting trends in the tequila market by offering refined products such as sipping tequilas, high-end blends, and small-batch varieties, typically made with 100% blue agave and traditional production methods. The market is also expanding to include flavored tequilas, like lemon, lime, and grapefruit, which appeal to new consumers, while bold pepper-infused tequilas cater to more experienced drinkers.

Distribution Channel Insights

The sales of premium spirits through on-trade channels accounted for a revenue share of 56.9% in 2023. The on-trade distribution channel, which includes bars, restaurants, clubs, and hotels, plays a pivotal role in shaping the consumption patterns of premium spirits. These establishments are increasingly curating their drink menus to include a diverse range of premium offerings, providing consumers with tailored experiences that elevate traditional drinking occasions. Moreover, the growing interest in craft cocktails, artisanal brands, and premium mixers has led to a vibrant cocktail culture, encouraging patrons to explore sophisticated drink options in social settings.

The sales of premium spirits through off-trade channels are expected to grow at a CAGR of 10.9% from 2024 to 2030. The convenience of purchasing spirits from retail channels that offer extensive product listings, competitive pricing, and personalized shopping experiences has made the off-trade channel increasingly popular, especially among millennials and younger demographics who value both quality and convenience.

The primary driver in the off-trade distribution of premium spirits is consumer convenience. Retail outlets such as liquor stores, supermarkets, and convenience stores provide consumers easy access to various premium spirits brands and types in one location. Consumers appreciate the convenience of purchasing premium spirits while shopping for other groceries or household items. Online retail platforms have further enhanced accessibility, allowing consumers to order premium spirits from the comfort of their homes, leading to increased off-trade sales.

Regional Insights

The North America premium spirit market is accounted for a revenue share of over 28.4% in 2023. The trend for premiumization is expected to drive the market growth. The presence of key players such as Bacardi Limited and Campari Group is also expected to fuel market growth. The popularity of brands such as Kendall-Jackson, Jack Daniels, and Absolut has resulted in an increased demand for spirits, including cognac, vodka, and whiskey, in the region. Premium brands witness a greater demand due to the perception of alcohol as a status symbol, the association of ‘premium’ labels with better taste and quality, and the rise in per capita income of consumers.

In September 2023, Johnnie Walker, known for being the top-selling Scotch whiskies globally, introduced a novel and innovative blend called "Johnnie Walker Blue Label Elusive Umami." This blend is a result of a unique collaboration between Emma Walker, the esteemed Master Blender, and Kei Kobayashi, a globally acclaimed chef. Together, they leveraged their extensive expertise to craft this distinctive blended Scotch whiskey, drawing inspiration from umami, often regarded as the elusive fifth taste.

U.S. Premium Spirits Market Trends

The U.S., premium spirits market is dominated by agave and whiskey categories. Consumers in the U.S. are increasingly interested in premium and super-premium alcoholic beverages, opting for quality over quantity. There is a growing interest in craft and artisanal varieties, as well as ethnic-flavored spirits. This has been part of a broader trend toward more diverse and creative offerings in the spirits market. Moreover, the craft spirits boom has introduced a range of new brands that focus on quality and unique packaging design.

Tequila and American whiskey are particularly popular, with diverse options like reposado, añejo, and single-barrel offerings drawing in consumers. Strong brand leaders such as Don Julio and Jack Daniel’s set benchmarks, allowing for exploration within these categories. The rise of American whiskey, including Bourbon and Tennessee whiskey, has diversified the market, appealing to a broader range of tastes. This growth is driven by the appeal of high-quality, distinctive products and the influence of powerful brands that elevate these spirits to lifestyle status.

Europe Premium Spirits Market Trends

The rapid rise in demand for premium quality spirits because of altering cultural views among the region's young and affluent population is a primary driver of the spirits market's expansion in the region. In comparison to their normal spirit selections, an increasing number of European consumers are looking for new, more exciting offerings, which is driving revenue generation in the spirits sector.

An increased focus on health and wellbeing is driving the growth of the Europe market for premium spirits, leading consumers to favor quality over quantity. This shift to premiumization has spurred a growing interest in exploring the craftsmanship behind spirits, such as wood-aged brandies and whiskies with unique finishes. Consumers are trading in hand-crafted, vintage products that reflect the distiller's art. This preference for high-quality spirits encourages moderate and responsible drinking, a trend supported by industry bodies. Additionally, premium spirits are often featured in airport stores, showcasing Europe's finest artisan spirits to a global audience and inspiring ongoing innovation among producers.

Asia Pacific Premium Spirits Market Trends

The premium spirits market in Asia Pacific is expected to grow at 10.9% from 2024 to 2030. The demand for premium spirits in the Asia Pacific region is experiencing significant growth, propelled by strategic marketing from major brands like Pernod Ricard and Diageo. According to the Scotch Whisky Association, Asia-Pacific surpassed the European Union as the largest buyer in the £6 billion (USD 7.5 billion) Scotch whisky export market in 2023. Six of the ten major destinations for Scotch exports in the first half of 2023 were in Asia. Pernod Ricard’s Chivas brand saw substantial success, with its Royal Salute whisky achieving a 32% revenue increase, primarily driven by rising consumption in Asia.

This rising demand is reflected in the impressive sales figures reported by leading companies. Pernod Ricard announced a 17% increase in Scotch sales for June 2023, with the Asia Pacific region contributing a 21% increase to this growth. Diageo, while experiencing only a 2% growth in the volume of Scotch shipped, saw a 12% increase in net sales, indicating a shift towards higher-priced premium products. These figures underscore a broader trend of consumers in Asia willing to spend more on premium spirits despite economic slowdowns globally.

Key Premium Spirits Company Insights

Legacy brands leverage their long-standing history and craftsmanship to attract consumers seeking authenticity. These brands often emphasize their traditional production methods, premium ingredients, and origin stories.

Smaller, craft distilleries are challenging established brands by offering unique, artisanal products. These players often appeal to consumers looking for bespoke experiences and are quick to innovate in terms of flavor and production techniques.

Recent Developments

• In July 2024, Suntory Holdings announced the establishment of Suntory India Private Limited, which is designed to support corporate functions essential for building a strong business foundation. This initiative aims to accelerate growth in its current spirits sector and create opportunities within the soft drinks and health and wellness markets in India.

• In June 2024, Pernod Ricard strengthened its dedication to its American Whiskey portfolio by launching a new Global Brand Company in the U.S. named North American Distillers (NADL). This specialized entity will be led by Richard Black, a veteran Pernod Ricard executive with 23 years of experience in the whiskey and cognac sectors, previously holding positions at Chivas Brothers and most recently serving as the Global Marketing Director for Martell in Paris. NADL will oversee the global marketing strategy and production of the company's premium American Whiskey brands, utilizing Pernod Ricard's extensive global network to drive growth. This encompasses all Pernod Ricard operations related to American whiskey across North America.

• In June 2024, Constellation Brands is a leading producer of wine, beer, and spirits, with operations in Italy, the U.S., and New Zealand, among others. As part of the partnership, TOPIKOS plans to launch five new brands in Canada-High West Whiskey, Casa Noble Tequila, Tequila Mi Campo, SVEDKA Vodka, and Nelson Brothers Whiskey.

• In May 2024, Asahi Beverages announced its acquisition of Never Never Distilling Co., a leading super-premium gin distillery in Australia known for its exceptional craftsmanship and multiple awards. Since its founding, Never Never has experienced remarkable growth and recognition in the spirits market. With Asahi's extensive experience in consumer branding and strong connections with customers, the partnership is set to enhance Never Never's development in line with the brand's ambitious goals for the future.

• In May 2024, Rémy Cointreau and ecoSPIRITS unveiled a four-year global licensing agreement that enhances their current collaboration in the UK while extending their partnership to the U.S. and other international markets in the future. This initiative aims to expand the successful pilot project that launched in early 2023 in the UK, where two of Rémy Cointreau's brands were introduced into ecoSPIRITS’ innovative circular packaging system at select on-trade venues, primarily in the London area.

• In April 2024, Islay distillery, owned by LVMH, unveiled a new whisky named Ardbeg Spectacular. The release marks the first time that an Ardbeg whisky has been aged in Port casks. The notes consist of candied fruit, smoked pecans, and incense candles. On the palate, it reveals dark chocolate and mint, while the finish is characterized by a lingering sensation of salted caramel and a refreshing hint of cooling menthol.

• In February 2024, Diageo unveiled a collection of premium ready-to-drink (RTD) bottled cocktails in the UK, featuring three distinct offerings crafted from its top-selling spirits. The Cocktail Collection includes a Cîroc Cosmopolitan, a Johnnie Walker Old Fashioned, and a Tanqueray Negroni. With the RTD segment emerging as one of the fastest-growing categories in the spirits industry, Diageo is strategically positioning itself to capitalize on this expansion. The company also introduced canned versions of both Cîroc and Smirnoff.

• In January 2024, Asahi Europe & International (AEI), the international arm of Asahi Group Holdings, officially acquired Octopi Brewing, a well-known contract beverage production and co-packing facility located in Wisconsin, U.S. This strategic move represents a significant milestone in Asahi’s growth strategy and aligns with its global objectives for popular brands like Asahi Super Dry, as well as other esteemed premium beers such as Kozel, Pilsner Urquell, Peroni Nastro Azzurro, and Grolsch. This acquisition paves the way to produce these beers in the U.S. for the first time.

Premium Spirits Market Report Scope

Global Premium Spirits Market Report Segmentation

This report forecasts volume & revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the premium spirits market report based on product, distribution channel, and region:

• Product Outlook (Volume, Million Liters; Revenue, USD Billion, 2018 - 2030)

  • Vodka

  • Whiskey

  • Gin

  • Tequila

  • Rum

  • Brandy

  • Others

• Distribution Channel Outlook (Volume, Million Liters; Revenue, USD Billion, 2018 - 2030)

  • On-Trade

  • Off-Trade

• Regional Outlook (Volume, Million Liters; Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

    • France

    • Spain

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia & New Zealand

  • Central & South America

    • Brazil

  • Middle East & Africa

    • South Africa