Vodka Market - Forecast(2024 - 2030)

Vodka Market Overview

The Vodka Market size is estimated to reach $38.9 billion by 2027, growing at a CAGR of 3.9% during the forecast period 2022-2027. Vodka is frequently delineated as distilled spirit or distilled alcoholic beverage fabricated from starch-rich grains such as wheat malt, flaked maize, rye, and sorghum. Ethanol and water are two primary liquids that vodka consists of. Vodka preparation includes the fermentation of fruit and grains with bacteria and yeast to convert possible sugars into alcohols. Fermentation is immediately followed by distillation (purification) where the obtained liquid is heated to enlarge its alcohol by volume content. After distillation water is poured in order to reduce the overall alcohol content. The alcohol by volume content of vodka may vary from region to region, however, it generally holds an ABV of around 37-40%. Owing to the requirements imposed on alcohol used in vodka production, mainly the content of methanol, acetaldehyde, ethyl acetate, and higher alcohols is measured via direct sample injection into the gas chromatograph equipped with a flame ionization detector (FID). It was originated in the Russian Federation and Poland and holds a massive fan following in European countries like Poland and Germany. Similar to wines, if taken in moderate quantity vodkas do have several health benefits such as destressing, proper hair growth, weight loss, and reduced risks of inflammation and heart complications. The vodka market outlook is interestingly quite captivating due to enlarging spirit consumption by millennials. Nevertheless, innovative flavors, stimulating trends of night-life, and augmenting living standards and GDP per capita income are the primary factors set to drive the growth of the Vodka Market for the period 2022-2027.

Report Coverage

The report: “Vodka Market Forecast (2022-2027)”, by Industry ARC, covers an in-depth analysis of the following segments of the Vodka Market.

By Type: Plain Vodka and Flavored Vodka.
By Quality: Average, Premium, and Ultra-Premium.
By Distribution Channel: Off-trade (=Supermarkets, Wine shops, and others), On-trade (=Bars, Discos, Restaurants, and others).
By Geography: North America (U.S., Canada, and Mexico), Europe (Germany, UK, France, Italy, Spain, Russia, and Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Australia & New Zealand, and Rest of Asia-Pacific), South America (Brazil, Argentina, Chile, Colombia and Rest of South America) and Rest of World (the Middle East and Africa).

Key Takeaways

• Geographically, the Europe Vodka Market accounted for the highest revenue share in 2021. However, Asia-Pacific is poised to dominate the market over the period 2022-2027.
• Heightening alcohol consumption and Sweep modernization is said to be a preeminent driver driving the growth of the Vodka Market. Rigid government policies and leanings toward drinks with low alcohol by volume content are said to reduce the market growth.
• Detailed analysis of the Strength, Weaknesses, and Opportunities of the prominent players operating in the market will be provided in the Vodka Market report.

Vodka Market Segment Analysis-By Type

The Vodka Market based on the type can be further segmented into plain vodka and flavored vodka. The flavored Vodka segment held the largest share in 2021. The growth is owing to the broadening demand for flavored drinks throughout the world. Elyx, raspberry, grapefruit, lime, citron, pepper, berry acai, rhubarb, and others are some of the most desired and consumed flavors of vodka throughout the globe. Owing to their aroma and sweet taste, flavored vodkas have drawn the attention of millennials and adults. In addition to that, they are a better option while preparing cocktails as they reduce the necessity of additional syrups. Moreover, the flavored vodka segment is estimated to be the fastest-growing with a CAGR of 4.5% over the forecast period 2022-2027. This growth is owing to the availability of organic options. Many companies like “Prairie Organic Spirits” offer options of organically prepared flavored vodka which are gaining utmost recognition among consumers.

Vodka Market Segment Analysis-By Distribution Channel

The Vodka Market based on distribution channels can be further segmented into off-trade (=supermarkets, wine shops, and others), and on-trade (=bars, discos, restaurants, and others). The off-trade segment held the largest share in 2021. The growth is owing to the wide-scale presence of wine shops in urban and bucolic areas. According to a recent report, with a 1.3% expansion in 2021, the number of liquor stores in the U.S. reached around 43000. On another hand, the widespread existence of modern retail outlets like supermarkets is extending consumers the conveniences to make an easy purchases. Moreover, the pandemic outbreak has strangled the sales of on-trade facilities as they are prompted by the government to function with less than half of their capacity. As a result, possible customers of on-trade channels are left with no option but to undergo off-trade purchases. Furthermore, on-trade is estimated to be the fastest-growing segment with a CAGR of 4.4% over the forecast period 2022-2027. This growth is owing to the re-entry of on-trade facilities into business as infection rates are curbing. Moreover, on-trade channels like bars help people associate with strangers and extend varieties of options that off-trade don’t.

Vodka Market Segment Analysis-By Geography

The Vodka Market based on Geography can be further segmented into North America, Europe, Asia-Pacific, South America, and the Rest of the World. Europe held the largest share with 38% of the overall market in 2021. The growth in this segment is owing to the factors such as heavy consumption of vodka on annual basis. Russia is by far the biggest vodka consumer in the world with more than 11 liters of average consumption annually. Likewise, other European countries such as Poland, Bulgaria, Slovakia, and Ukraine have managed a spot in the list of biggest vodka consumers. Europe’s unconventional affection toward alcohol has provided a fairground for the vodka market to flourish throughout the continent. On another hand, high living standards, comfortable GDP per capita incomes, and exuberant nightlife are other prominent factors driving the growth of the vodka market in the respective segment. However, Asia-Pacific is expected to be the fastest-growing segment over the forecast period 2022-2027. This growth is owing to enlarging western influence. Asian nations have imported the vast majority of things from European culture including culinary habits, way of dressing, and many more. In addition to that, ameliorating infrastructure and disposable incomes due to budding affluence have their fair share in the growth of the vodka market throughout the Asian continent.

Vodka Market Drivers

Sweep modernization and spiraling exuberant nightlife culture are Anticipated to Boost Product Demand

Rapid modernization has played a crucial role in altering people’s tastes and preferences. Individuals’ beliefs and leanings have witnessed a drastic change over the years. Earlier, when even the mention of the world like alcohol used to be a taboo among many cultures, whereas, today it has become a stuff of display for many people to showcase “How modern and open-minded they are ” Millennials have started visiting bars and discos in the name of trends like “Live in the moment.” According to a report, youngsters account for more than 21% of the bar’s revenue. As a result, nightlife trends are intensifying and driving the vodka market.

Migrations and improving quality of life are Expected to Boost Product Demand

As of 2022 more than 50% of the population of the world is residing in urban areas. Nevertheless, 2/3rd of the total world population is projected to migrate toward cities by 2050. Developing countries like India are witnessing a major surge in urban population with more than 32-33% of the total population living in cities. Ultimately, the urban lifestyles are ascending their exposure to a cue like state-of-the-art on-trade channels (restaurants, cafes, bars, and others) which acts as a potent trigger to visit such facilities. On another hand, mounting GDP per capita incomes worldwide are triggering the demand for distilled spirits like vodka. Besides Europe and North America, Several Asian countries like China, India, Bangladesh, and Indonesia are recording an escalation in their per capita incomes. For instance, compared to 2020 Indonesia’s GDP per capita in 2022 has risen to $4,500 from $3,920. Similarly, China, India, and Bangladesh have witnessed slight surges.

Vodka Market Challenges

Health issues linked with excessive consumption and strict government policies are Anticipated to Hamper Market Growth

Intemperate consumption of such alcoholic beverages can erupt in numerous health complications such as strokes, lung failure, unstable digestion, cognitive disorders, and depression. According to WHO, worldwide, 3 million deaths every year result from harmful use of alcohol, this represents 5.3% of all deaths. The harmful use of alcohol is a causal factor in more than 200 disease and injury conditions. Overall 5.1 % of the global burden of disease and injury is attributable to alcohol, as measured in disability-adjusted life years (DALYs). Further, alcohol consumption causes death and disability relatively early in life. In the age group 20–39 years, approximately 13.5 % of the total deaths are alcohol-attributable. As a result, many people may turn aversive toward it and cut down on their consumption. On another hand, curbing demand and unstable supply chains due to harsh pandemic restrictions imposed by governments are anticipated to pose severe challenges to the growth of the vodka market. Last but not least, stringent rules regarding the open marketing of spirits like vodka can also cripple the steady growth of the vodka market.

Vodka Industry Outlook:

Product launches, mergers and acquisitions, joint ventures, and geographical expansions are key strategies adopted by players in the Vodka Market. Key companies in this market are-

1. Brown-Forman
2. Belvedere
3. Bacardi
4. Constellation Spirits
5. Diageo
6. Suntory Holdings
7. Pernod Ricard
8. Davide Campari-Milano
9. Anheuser Busch
10. Iceberg Vodka

Recent Developments

• September 23, 2021, Paris, France-based well-known pastis aperitifs manufacturing company “Pernod Ricard” publicized the successful acquisition of UK-based recognized online seller of fine spirits “The Whiskey Exchange” Pernod revealed that the fundamental reason behind this acquisition is to strengthen online sales portfolio.
• August 17, 2020, UK-based beverage alcohol company “Diageo” announced that the company has added American Aviation Gin, a gin brand to its portfolio through the successful acquisition of the US-based company “Aviation Gin LLC.” Diageo made a total payment of $610 million in order to wrap up the acquisition process.
• February 28, 2020, Sesto San Giovanni, Italy-based spirit and wine-producing company “Davide Campari-Milano” announced that it has successfully acquired its France-based distributor “Baron Philippe de Rothschild.” A payment of 60 million euros to bring the acquisition to a close. Also, the acquisition has extended several business benefits to the company as France is one of its core business markets.

Relevant Links:

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