The Chinese Spirits Market: What Consumers Drink and Why?




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Product Synopsis

This report provides the results for the Spirits market in China from Canadean's unique, highly detailed study of consumers' Consumer Packaged Goods (CPG) consumption habits, and forms part of an overall series covering all CPG product markets. Its coverage includes, but is not limited to, consumption behaviors, the extent to which consumer trends influence their consumption, the value of the market these trends influence, and brand and private label choices as well as retailer choices in organized sector. Much of this information can also be analyzed by specific consumer groups, providing hard and fast data on consumers and markets at the product category level.

Introduction and Landscape

Why was the report written?

Marketers in the Spirits market face a major challenge. Understanding market size and segmentation is valuable, but the key to effective targeting is knowing just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends. This data report solves these problems by providing survey-based data on consumer trends and consumer groups, and market data that shows the exact size of consumer groups, how much of the Spirits market they account for, and which consumer trends drive their behavior.

What is the current market landscape and what is changing?

As consumer confidence increases with the economic recovery, consumer trends will be directly affected. Since the global financial crisis of 2008-2009 the organized retail market has been characterized by an increase in the amount of discounted and own-brand products. Brandy, Gin and Genever, Liqueurs, Rum, Specialty Spirits, Tequila and Mezcal, Vodka, and Whiskey are not considered essential items and therefore consumption patterns have been negatively affected. As economic and market recovery continues over 2012, consumption patterns will record a positive trend in both the medium and heavy frequency bands and the amount of non-users should decrease

What are the key drivers behind recent market changes?

Consumers' uptake of products and the influence of consumer trends are fundamental causes of change in markets - making knowing what these trends are and the extent of their influence crucial. The survey-based data provided in this report examines over 20 consumer trends that affect the market and examines the share of consumption across 26 consumer groups. This data provides a detailed insight into exactly who the consumer is and just how much impact the latest consumer trends are having.

What makes this report unique and essential to read?

The data provided is unique in the market as it tracks consumer behavior through to its actual value impact on a product market. This provides readers with a unique data analysis of the market, allowing marketing tactics and strategy to be updated in line with the very latest consumer behaviors.

Key Features and Benefits

  • Consumer data, based upon proprietary surveys and then consumer group tracking and modeling for the following specific categories: Brandy, Whiskey, Rum, Gin and Genever, Vodka, Tequila and Mezcal, Specialty Spirits, andLiqueurs.
  • Detailed consumer segmentation covering over 26 consumer groups, 20 consumer trends, and consumption frequency for each product category.
  • Consumer penetration for brands and private labels, based upon the original survey and then subsequent consumer tracking and modeling.
  • Unique retailer choice data at the product category level in organized sector, based upon the original survey and then subsequent consumer tracking and modeling.

Key Market Issues

  • Rum consumption is highest among Early Young Adults and Older Young Adults, with consumption frequency declining as consumers grow older. Therefore, marketing agencies and rum manufacturers should factor in these trends and should increase their focus on younger age groups in their marketing plans. 
  • The highest private label penetration in the Chinese Spirits market is in liqueurs, with penetration marginally higher than that in Brandy and Specialty Spirits. Retailers should therefore prioritize private label programs in these areas.
  • Consumer survey results indicate that Better value for money, Changing lifestages, and Health are the leading trends influencing spirits consumption in Brazil. Spirits manufacturers and marketing agencies need to consider these behavioural trends in order to effectively reach their target audience.

Key Highlights

  • Although the Chinese market is highly fragmented in terms of the number of retailers operating in the organized sector, international retailers account for a significant share of spirits distribution in the country. The two largest retailers (both international) account for just over half of the total market by volume. This indicates a relatively higher bargaining power for international retailers compared to locally established distribution chains. 
  • Switching analysis indicates that consumer loyalty is low in the spirits market in China as the top three retailers witnessed a large number of end consumers switching to other retailers in the last six months.
  • Market valuation analysis shows that Specialty Spirits account for the largest share in the spirits market in China, both in value and volume terms, indicating a strong preference for locally manufactured spirits. This category is expected to remain an undisputed leader in years to come.