The spirits market - Italy

1.1 Definition and presentation

According to the regulation of the European Communities n. 1576/89 spirit (or spirits) is an alcoholic liquid "intended for human consumption, having particular organoleptic characteristics and a minimum alcoholic strength of 15% vol".

A spirit is obtained by distillation or maceration or aromatization of ethyl alcohol or other spirit drinks.

Spirits can be divided in:

• Distillates: obtained by distillation of fermented products;
• Liqueurs: obtained by aromatization of alcohol or other spirit drinks, and are characterized by a sweet taste;
• Bitters: obtained by flavoring alcohol, and are characterized by a bitter taste.

The global spirits market is expected to grow at a rate of 3.45% through 2028. In terms of geographical distribution, the U.S. accounts for over 27% of the global market, while Asia Pacific proves to be the region with the highest growth rate. Moreover, the vodka segment is currently the largest segment, accounting for 25.1% of the global market share.

In 2019, spirits consumption in Italy grew by +8.25% in terms of value and +5.37% in terms of volume compared to the previous year. In particular, Gin recorded the highest growth, at a rate of 27.15%, confirming itself as one of the most loved spirits by Italians along with Vodka.

The Italian market is organized around two main types of operators. On one side we find important international groups, whereas on the other side we find small and medium producers or local distilleries specialized in one type of spirits.

In terms of distribution, the Italian panorama is very concentrated. In fact, the CDA consortium represents 23.0% of the Italian liquid food distribution market in the out-of-home channel. In 2019, among the channels that have grown the most we find the restaurant channel (+4.34%), followed by the bar channel (+3.12%), and finally the local channel with evening and night activity (+2.64%).

Finally, the Covid-19 health emergency had a negative impact on the alcohol industry in Italy due to the prolonged closure of restaurants, bars and night clubs.

1.2 Global Market Analysis

The global spirits market has been valued at USD *** billion in ****, and is expected to reach a value of USD *** billion by ****. The market under review, after slowing down due to the closure of venues during the lockdown, has seen growth in recent years, experiencing an average annual growth of *.**% from ...

1.3 Key figures of the spirits market in Italy

Italy in the Food & Beverage market is recognized as one of the best in the world, both in terms of quality and tradition. The market of spirits is very fragmented in terms of offer as every region has its own traditions and production can also be done by small businesses. To ...

1.4 Import and Export Analysis

The Italian spirits market is recognized worldwide for the excellence of its products. In fact, as the following chart shows, the value of exports far exceeds the value of imports. On average, it is possible to estimate that exports quintuple imports each year, fluctuating between ***% and ***% over the period considered (***).

it ...

1.5 Impact of Covid-19

Even in the Italian market, the pandemic mainly reduced consumption of spirits, as reflected in the net balance (***).

it is therefore clear that the restrictions imposed by the government on Ho.Re.Ca. Serious impacts on alcohol consumption, but only offset by the positive sales trend recorded in the large-scale retail ...

2.1 Demand Overview

In ****, **.*% of the population aged ** and older consumed at least one alcoholic beverage during the year, remaining stable compared to ****. The share of daily alcohol drinkers is **.*%, down from what was observed a decade ago (***) are increasing.[***]

Over the past decade, starting in ****, there has been a slow but gradual increase ...

2.2 Demand Drivers

Below we list the key demand and growth drivers for the spirits and spirits industry:

Global alcohol consumption in general: fashions are now globalized Household purchasing power (***); Tourism (***) The evolution of legislation and the increase in penalties for alcohol-related accidents Weather conditions (***) General emotional status Social restrictions

2.3 Geographical distribution of alcohol consumption

Considering the above map, it is possible to see differences in the average daily consumption of alcohol and hard liquor. Given the absence of data on the specific category of spirits, we rely on these data to infer differences in consumption attitudes among Italian regions. Even though we are faced with ...

2.4 New demand trends

Binge-drinking

Binge drinking, which literally means alcoholic binge, refers to the consumption of * or more alcoholic beverages in a short period of time away from meals, with serious health and safety risks. The purpose of consuming alcohol in this manner is to feel intoxicated until total intoxication is reached, meaning the ...

3.1 Market structure and dynamics

In Italy, the total number of companies involved in the production distillation, rectification and blending of spirits is *** (***). it is difficult to separate companies producing spirits and spirits since they often produce both. In the graph below, it can be deduced that the total number of companies in the industry has ...

3.2 Production

Production Overview

As said, distillates are spirits, with a minimum alcohol by volume of **%. This category includes liqueurs, bitters and many mixtures obtained by the union of aromatic substances, sugars, alcohol and other distillates. What differentiates distillates from wines, ciders and beers is the process of separation of the distillation liquid ...

3.3 Distribution

As far as distribution is concerned, the pandemic has profoundly altered the balance between the various distribution channels. In fact, there has been an acceleration of online sales, but, despite this, supermarkets and hypermarkets are still the favorite channels for consumers to buy bitters and spirits (***). They are followed by specialized ...

3.4 The main players in the supply chain

In Italy, the market leader in terms of turnover is Gruppo Campari, which has ** production plants around the world and owns, among others, brands such as Campari, Campari Soda, Aperol, Cinzano and Averna. (***). Other important players in terms of turnover are Branca International with a turnover of ***.* mln euros in **** and ...

4.1 Type of products

Annex * of EU Regulation ****/*** of April **, **** sets out the different categories of spirits (***). The main ones turn out to be:

Rum Whisky Grain, wine, grape marc or fruit residue brandy Brandy or Weinbrand Fruit brandy, apple cider, pear cider, honey, beer brandy Vodka Gin Aniseed Spirit Drink Bitter Flavored Vodka Liqueur Cream ...

4.2 Price Analysis

This chart shows the trend in alcohol prices in Italy between **** and ****. The base year is ****, where the value is ***. Thus, we can see that prices have increased by *.*% since ****. This can be explained by both the pandemic situation (***) and the decrease in volumes of alcohol consumed and the introduction of ...

5.1 Regulation

Excise

The current taxation (***). On a bottle of whisky of *.** at **% of alcohol is therefore applied a tax of about *.* euros. To this must be added VAT at **% because "the excise duty contributes to form the value of products". Therefore, a ** euro whisky, bottle of *.* liters at **% of alcohol will ...

6.1 Segmentation

• Pernod Ricard Groupe
• La Martiniquaise Bardinet
• Campari
• Bacardi
• Branca International
• ILLVA SARONNO
• Molinari