Spirits - GCC

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

Customer preferences: In the GCC region, there is a growing demand for premium and luxury spirits, driven by a rising middle class and increasing disposable incomes. Consumers are becoming more sophisticated in their tastes and are willing to spend more on high-quality spirits. Whiskey, vodka, and gin are particularly popular among consumers in the GCC, with a preference for international brands that are perceived as prestigious and of superior quality. Additionally, there is a growing interest in craft spirits, as consumers seek unique and artisanal products.

Trends in the market: One of the key trends in the Spirits market in the GCC is the increasing popularity of flavored spirits. Flavored vodka, rum, and whiskey have gained traction among consumers, who are looking for new and exciting taste experiences. This trend is driven by the desire for variety and experimentation, as well as the influence of international travel and exposure to different flavors. Another trend in the market is the rise of online sales and e-commerce platforms. Consumers in the GCC are increasingly turning to online channels to purchase spirits, as it offers convenience, a wide selection of products, and competitive pricing. E-commerce platforms have also made it easier for consumers to discover and explore new brands and products, further driving the growth of the Spirits market in the GCC.

Local special circumstances: The GCC region has a unique set of circumstances that have contributed to the growth of the Spirits market. One of the key factors is the prevalence of tourism in the region. The GCC countries, such as the United Arab Emirates and Saudi Arabia, are popular tourist destinations, attracting visitors from around the world. Tourists often indulge in the local cuisine and beverages, including spirits, which has created a significant demand for these products. Furthermore, the GCC region has a large expatriate population, who have diverse cultural backgrounds and preferences. This has led to a demand for a wide range of spirits from different countries, catering to the varied tastes of the expatriate community. The presence of international hotels, bars, and restaurants in the region has also contributed to the growth of the Spirits market, as they offer a wide selection of spirits to cater to the preferences of their customers.

Underlying macroeconomic factors: The growth of the Spirits market in the GCC is also influenced by underlying macroeconomic factors. The region has experienced strong economic growth in recent years, driven by factors such as infrastructure development, government investments, and diversification efforts. This has led to an increase in disposable incomes and consumer spending power, which has translated into higher demand for spirits. Additionally, the GCC countries have implemented various policies and initiatives to promote tourism and attract foreign investments. These efforts have helped to create a favorable business environment, attracting international spirits brands to establish a presence in the region. The presence of international brands has not only increased competition in the market but has also contributed to the overall growth and development of the Spirits market in the GCC.

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.