DUBLIN--(BUSINESS WIRE)--The "Liquor Industry in South Africa 2024" report has been added to ResearchAndMarkets.com's offering.
This report focuses on the South African liquor industry, including the manufacture, wholesale and retail of alcoholic beverages including beer, wine, spirits and ready-to-drink beverages. There is comprehensive information on the size of the industry, including consumption, sales, volumes and market share. The report discusses prices, taxes, regulations, notable players, recent investments, corporate actions and developments.
There are profiles of 23 industry players including producers and wholesalers such as DGB, Diageo, Heineken Beverages, SAB and Pernod Ricard, retailers such as Liquor City, Norman Goodfellows, Overland and Picardi and the major supermarkets, and distributors such as Wines of the World and Vinimark.
Introduction
- The liquor industry has been affected by consumers trading down to cheaper alcohol brands.
- Liquor producers have reported tough trading conditions, despite loadshedding having abated.
- Illicit trade in alcohol, which a 2020 report estimated accounted for 22% of total alcohol consumption, remains a key concern for the industry.
- The poor economy has limited growth opportunities in the sector.
- Producers are concerned about above-inflation increases in excise tax, declining wine consumption, poor logistics and pending liquor regulations.
- There is concern about production being concentrated in foreign hands following Heineken's acquisition of Distell in 2023.
- Supermarkets continue to increase their hold over liquor retail.
Trends
- Affluent wine drinkers are increasingly looking for high-quality wines.
- Flavoured alcoholic beverages like ciders and coolers increased their share of the liquor basket.
- Slowing consumer spend has resulted in consumers either trading down (for example to box wine) or moving away from spirits like whisky.
- The emergence of online shopping has led to increased competition, with new online stores emerging regularly.
- The trend to low and no-alcohol alcohol options continues.
- Wine consumption has fallen. Wine sold in glass bottles has declined in recent years, while bag-in-box consumption has grown.
Opportunities
- Changing consumer preferences provide opportunities for innovation and the creation of new drinks and varieties to grow sales.
- Demand for products (including packaging) that are created sustainably.
- Growth in demand for healthy alternatives in no-alcohol and low-alcohol beverages.
- Growth in online sales, which are still relatively small, provides retailers and producers an alternative route to market.
- Liquor imports from the rest of Africa with lower import tariffs.
- The trend towards premiumisation, with growth in premium brands set to outpace affordable brands.
Challenges
- A long-term decline in the number of wine producers and area under vineyards, land reform and climate change challenges.
- Climate change and water security are a major challenge for the industry.
- Global decline in the wine drinking population.
- Health and social concerns, and proposed amendments to liquor regulations could result in a higher minimum drinking age.
- Logistics challenges have affected wine exports.
- Low economic growth and high inflation has constrained consumer spending.
- Rising raw material costs for alcohol producers.
- The illicit alcohol industry has grown.
Outlook
- Liquor sales have come under pressure as above inflation price increases affected consumer demand and led them to trade down.
- However, liquor retailers, as well as some producers like SAB, reported a recovery in H1 2024.
- A better wine harvest was expected in 2025, given more favourable weather in 2024.
- However, consumer demand for wine is expected to contract, before improved economic conditions and population growth create some demand pull.
- Wine export volumes are expected to remain constrained.
- Liquor retail sales were expected to show steady growth in 2024.
For more information about this report visit https://www.researchandmarkets.com/r/jdo9uf
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