Flavored Spirits Market Trends

Key Emerging Trends in the Flavored Spirits Market

Product Innovation in the Flavored Spirits Industry

The demand for flavored spirits is on the rise worldwide, especially among millennials who view alcoholic beverages as a symbol of premiumization, innovation, and an integral part of their social lifestyle. Millennials, in particular, exhibit a strong preference for new and diverse flavors, constantly seeking unique and unconventional beverages to satisfy their taste buds. This inclination towards experimentation is considered a key driver for the manufacturers of flavored spirits, providing them with an opportunity to generate substantial revenue through innovative offerings.

To cater to this demand, market players are focusing on developing and introducing new and exciting flavors, some of which were traditionally limited to bars. According to analysis by MRFR, consumers mostly favor traditional real fruit-infused flavors, emphasizing their desire for the perfect blend of flavor and spirit. While the flavored spirits market was initially dominated by confectionery flavors, it has since evolved with the introduction and acceptance of innovative fruit-infused flavors. The introduction of new flavors, such as jackfruit-flavored vodka, has proven to be a successful strategy for market players, attracting consumers seeking novel taste experiences.

Investments in Research and Development (R&D) by market players play a crucial role in driving product innovation in the flavored spirits industry. Companies are allocating resources to explore and launch unique flavored products, contributing to the overall growth of the global flavored spirits market.

Growth of the Foodservice Industry as a Catalyst

The foodservice industry stands out as one of the primary consumers of flavored spirits, with hotels, bars, and pubs accounting for a substantial portion of sales. Flavored spirits are consumed directly or serve as a base in cocktails at social events, corporate conferences, and concerts. The popularity of cocktails and mocktails is on the rise, further boosting the demand for flavored spirits. The Hospitality, Restaurants, and Catering (HoReCa) industry is experiencing significant growth globally, particularly in developing countries like China and India.

The trend of dining out is gaining momentum, with people opting to eat out four to five times a week. MRFR analysis predicts that the trend of dining out in developing countries is expected to surpass that in developed countries such as the UK, France, and Italy. Several factors contribute to the growth of the HoReCa industry, including the adoption of new cultures, awareness of global trends, a willingness to experiment with new food and beverage options, and evolving lifestyles.

In the United States, the National Restaurant Association projected the restaurant industry's sales to reach USD 899 billion in 2020. Similarly, the Federation of Indian Chambers of Commerce and Industry (FICCI) forecasts a Compound Annual Growth Rate (CAGR) of 10% for the Indian foodservice industry from 2017 to 2022.

Consequently, the expansion of the foodservice industry, both in developed and developing countries, serves as a significant driver for the growth of the global flavored spirits market. The increasing preference for dining out, coupled with the growing popularity of cocktails and mocktails, creates a favorable environment for the consumption of flavored spirits in various social settings, further propelling market growth.