Total alcoholic beverages, especially spirits, have registered strong growth in value over the last 10 years, according to Diageo.

Spirits include vodka, tequila, mezcal, brandy and rum.

Diageo believes that the spirits business presents long-term sustainable growth opportunities, supported by attractive consumer fundamentals.

These include three key factors: the growth of the middle class, increased spirits penetration and premiumization in both developed and emerging markets.

One factor is that the base of consumers who can afford premium spirits is growing.

The latest United Nations forecasts suggest that the world’s population could grow to 8.5 billion by 2030(2).

Globally, an emerging middle class continues to grow in key markets such as China, where it is estimated that, between 2022 and 2030, the middle class and affluent consumer will increase by 80 million, reaching almost 40% of the population.

Spirits

According to Diageo, this continued growth in the «middle and upper middle class» income bracket should enable 470 million more consumers to access and enjoy its brands by 2032.

Consumers are increasingly choosing spirits over beer and wine.

Over the past five years, the global spirits market grew at a compound annual growth rate of 4 percent.

Spirits grew considerably faster, at a compound annual rate of 6 percent, as consumers increasingly shift away from beer and wine.

Another circumstance is that spirits, which are versatile and adaptable, occupy a strong position and have considerable room for growth, given consumer interest in new amenities suitable for a wider range of occasions, including with food and at home.

Consumers are «drinking better, not more» and are increasingly choosing brands and categories that stand out for their superior quality, authenticity and taste.

We call this trend premiumization, where consumers have a greater desire to explore new aspirational experiences, driving demand for quality beverages at different price points.