New Global Value Shares in Alcoholic Drinks: Quality Over Quantity?
Unsurprisingly, at a global level, brewers dominate the global alcoholic drinks leaderboard in volume sales while spirits producers have a greater role to play in value, according to Euromonitor International´s research. The new research includes modelled value shares at global and regional levels, building upon previously released country-level data.
AB InBev leads the global rankings in both volume and value terms, holding more than twice the share of second-placed Heineken in both. At the global alcoholic drinks level, nearly all beer-led companies command a greater share of volume than value, although the balance varies considerably.
Spirits-focused players Diageo and Pernod Ricard are both in the top five companies by value share; they benefit from the significance of premium international spirits brands in their respective portfolios. Diageo also holds a reasonably high rank in volume terms, boosted by the global dominance of its Guinness stout brand and its strong presence in beer in Africa.
Leading Global Alcoholic Drinks Companies by 2018 Value Share: Volume vs Value
Source: Euromonitor International
Beer brands: The influence of geography
Among the top five brewers, Heineken holds the highest share in value relative to its share in volume. This is a result of the company’s strong focus on the higher-end of beer, demonstrated by the broad geographic footprint of its premium eponymous brand.
Most beer brands’ volumes are focused on just a few markets, with some notable exceptions – namely Heineken and Budweiser. The limited geographic reach of many beer brands is due to the nature of the business, which involves large volumes being produced close to the point of sale. In terms of value share, this pattern gives a strong advantage to premium brands in high value markets, such as US-focused Bud Light. The reverse is true for the Chinese brands Snow and Tsingtao, particularly the former with its distinctly economy positioning.
LVMH: When less is more
Diageo is the leading global distiller in both volume and value terms. The company holds the top position in spirits value shares in all regions except Eastern Europe and Asia Pacific. Local distillers have a key role to play in the latter two regions – with a focus on vodka and baijiu respectively.
With a strong emphasis on premium products, LVMH ranks only 48th in spirits by volume, but eighth by value. LVMH is the leading player in cognac, with Hennessy its main brand in the category. Representing just 0.6% of global spirits by volume sales but 3.6% by value, cognac in many ways epitomises luxury in spirits.
Hennessy is one of the top brands in the two leading cognac markets, the US and China, and also holds a strong position in other key markets across regions including Russia, Germany, Taiwan and South Africa. Distillers create strong brand equity for their high-end spirits by positioning them as part of an aspirational and exclusive lifestyle. LVMH has successfully managed to position Hennessy as the leading luxury cognac brand in almost all of the world’s largest cognac markets, hence the company’s strong global standing in value terms.