Mid-priced spirits witnessed stagnant growth in 2021 as local consumers gravitated to other price bands. On the one hand, the impact of the pandemic continued to place pressure on mid-income and lower-income consumers, with many losing their income source in 2020 following major redundancies or were still trying to recover to pre-pandemic levels.
Following a challenging 2020 for spirits, the category witnessed a recovery in both on-trade and off-trade volume terms in 2021. Off-trade consumers increased their stockpiling of spirits at the beginning of the year (when future bans were highly likely due to a rising infection rate) as spirits are far easier to store for longer periods of time when compared to other alcoholic drinks.
On-trade sales of brandy recovered strongly in 2021, with off-trade volume sales also recording strong growth to sit just below pre-pandemic levels. This included the performance of established brands across price bands, such as Klipdrift, Richelieu and Olof Bergh, which fully recovered to surpass total volumes compared to 2019 levels.
While demand for alcoholic drinks greatly improved in 2021, spirits will likely face challenges over the forecast period due to the existing health and wellness movement in South Africa, which was compounded by the emergence of the pandemic. Spirits tend to contain high levels of alcohol per unit, which has a number of negative associations including obesity, liver disease, cancer and in severe cases, brain damage.
South African spirits is expected to become an increasingly concentrated competitive landscape over the forecast period, following the acquisition of Distell by Heineken NV. Although the deal was not formalised by the end of 2021, it is expected to be completed over 2022.
Despite the challenges caused by the alcohol bans and COVID-19 regulations, gin grew exceptionally well in 2021, based on a growing range of favour offerings, competitive pricing relative to other spirits and effective marketing, which positioned gin as an ideal beverage for both on-trade and off-trade consumption. In fact, leaders such as Gordon's Dry Gin and Old Buck were two of the few spirit brands to log positive growth from the onset of the pandemic.
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Understand the latest market trends and future growth opportunities for the Spirits industry in South Africa with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This is the aggregation of whisk(e)y, brandy and Cognac, white spirits, rum, tequila, liqueurs and other spirits.See All of Our Definitions
This report originates from Passport, our Spirits research and analysis database.
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