Spirits - Baltics

The Spirits market in Baltics has been experiencing significant growth in recent years, driven by changing customer preferences and local special circumstances.

Customer preferences: In the Baltics, consumers have shown a growing interest in premium and craft spirits. This can be attributed to a shift towards more sophisticated and discerning tastes, as well as an increasing focus on quality and provenance. Customers are willing to pay a premium for spirits that are made with high-quality ingredients and produced using traditional methods. Additionally, there is a rising demand for spirits that offer unique and innovative flavors, as consumers seek new and exciting drinking experiences.

Trends in the market: One of the key trends in the Spirits market in the Baltics is the growing popularity of locally produced spirits. Consumers are increasingly looking for products that are made in their own country or region, as they perceive them to be more authentic and of higher quality. This trend is particularly evident in the craft spirits segment, where small, independent producers are gaining traction. These producers often use traditional methods and locally sourced ingredients, which resonates with consumers who value craftsmanship and local heritage. Another trend in the market is the rising demand for premium spirits, such as aged whiskies and high-end vodkas. This can be attributed to an increase in disposable income and a growing middle class in the region. As consumers become more affluent, they are willing to spend more on luxury goods, including premium spirits. This trend is also driven by a desire for status and prestige, as owning and consuming high-end spirits is seen as a symbol of success and sophistication.

Local special circumstances: The Baltics have a long-standing tradition of spirits consumption, with vodka being a popular choice among consumers. This cultural preference for spirits has created a strong foundation for the market to grow and evolve. Additionally, the region's proximity to Russia, a major producer of vodka, has influenced the local drinking culture and preferences. Furthermore, the Baltics have a well-developed tourism industry, attracting visitors from around the world. This has contributed to the demand for spirits, as tourists often seek to try local beverages and take home unique souvenirs. The presence of duty-free shops and the availability of tax-free shopping in the region further encourage spirits consumption among tourists.

Underlying macroeconomic factors: The growth of the Spirits market in the Baltics can also be attributed to favorable macroeconomic conditions. The region has experienced steady economic growth in recent years, leading to an increase in disposable income and consumer spending. This has created a larger market for spirits, as consumers have more money to spend on discretionary items. Furthermore, the Baltics have a relatively young population, which is more open to trying new products and experiences. This demographic factor has contributed to the growth of the market, as younger consumers are more likely to experiment with different types of spirits and brands. In conclusion, the Spirits market in the Baltics is developing in response to changing customer preferences, local special circumstances, and underlying macroeconomic factors. Consumers in the region are increasingly interested in premium and craft spirits, as well as locally produced products. This trend is driven by a desire for quality, authenticity, and unique flavors. The market is also influenced by the Baltics' cultural tradition of spirits consumption, as well as the region's tourism industry. Favorable macroeconomic conditions, including economic growth and a young population, further contribute to the growth of the market.

Data coverage:
The data encompasses B2C enterprises. The at-home market covers retail sales via super- and hypermarkets, eCommerce, convenience stores, or similar sales channels. The out-of-home data encompasses all sales to hotels, restaurants, catering, cafés, bars, and similar hospitality service establishments. Combined numbers encompass both the at-home market and the out-of-home market. Both the at-home and the out-of-home market are valued at retail selling prices including all sales and consumption taxes.

Modeling approach:
Market sizes are determined through a Top-Down approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use resources from the Statista platform as well as in-house market research, national statistical offices, international institutions, trade associations, companies, the trade press, and the experience of our analysts. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending (e.g. consumer spending on alcoholic beverages, consumer spending at Hotels, Restaurants etc.), and price level index. This data helps us estimate the market size for each country individually.

Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing is well suited for forecasting the Alcoholic Drinks market with a projected steady growth. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:
The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level.