Factors including premiuimisation, convenience, artificial intelligence and a generational shift in consumer preferences are likely to shape the global spirits market in the future, a new study by GlobalData has found.
The study, Next-Gen Beverages: Bridging Affordability, Sensory, and Gen Z Preferences, suggests that the premiumisation trend in the spirits market is being matched with rising income levels among Gen Z consumers, while the need for convenience is also driving innovation across the FMCG market, including spirits.
The spirits market is expected to grow significantly faster than other beverage sectors, with an anticipated value CAGR of 9.4% from 2023-2028, GlobalData noted.
'A Growth Catalyst'
“The study highlights that premiumization is a growth catalyst in the spirits market and brand innovation is responding to this with premium ingredients, artisanal craftsmanship, and exclusive production techniques to appeal to consumers seeking luxury products," commented Nisarga Save, senior consultant and beverages analyst at GlobalData.
"The convenience trend is leading to the growth of the FAB and RTD cocktail categories, which offer consumers premium, bar-quality drinks in inexpensive, pre-packaged formats, catering to socialising at home or independently."
As Gen Z and millennials become dominant consumers in the spirits market, their preferences are shaping product development.
According to GlobalData, these younger generations are less loyal to traditional brands, preferring authenticity, innovation, and responsibility in their choices. They are more inclined toward unique and unconventional flavours and often explore craft and niche brands, relying heavily on social media and online communities for discovering new products.
'Profound Impact'
In addition to this, AI-led innovations are set to have a 'profound impact' on spirits development, says GlobalData.
Currently, AI is being used in product formulation, packaging design, route optimisation, and customer service, helping brands meet consumer demands while increasing operational efficiency. Going forward, AI-driven innovations are anticipated to play an essential role in creating premium experiences and enhancing customer engagement.
“Gen Z’s growing presence in the workforce and rising income levels make them a lucrative target for spirits brands, and a significant challenge for alcoholic beverage marketers due to their different preferences and priorities compared to previous generations," Save added.
"As consumers become more demanding, AI will play a crucial role in delivering both seamless experiences and operational excellence.”
