Opportunities in Premium Alcoholic Drinks: Trading Up Trends

Introduction

The current economic downturnespecially the historically low consumer confidence that has emerged in 2008presents a potentially challenging environment in which to drive premiumization going forward. The alcoholic beverage products that will be best insulated from down trading will be those with a compelling proposition benchmarked against Datamonitor's 'Premium Price Index' (PPI).

Scope

• The second in a series of three sector specific reports designed to help FMCG companies capitalize on consumers' desire to trade up
• Asia Pacific, Western European and US consumer wealth group data and primary survey data highlighting trading up behavior in 2008 by country
• A comprehensive analysis of how consumers form their perceptions of what constitutes a luxury/ premium alcoholic beverage proposition
• NPD analysis and detailed recommendations offering practical strategies based on the trends and insights uncovered throughout the report

Highlights

The rise of the so-called global middle class has been a major factor in facilitating trading up (or premiumization) across the globe. From 2002 to 2007, Hong Kong, China, and India witnessed the highest growth in the number of Mass Affluent Individuals

Perceptions of what is considered to be a luxury/ premium brand are dependant upon five key factors which make up what Datamonitor refers to as the 'Premium Price Index' (PPI). By using this as a reference, alcoholic beverage manufacturers and retailers can show consumers that their goods represent value for money in more than just price

The economic downturn will not result in wholesale changes in premium alcoholic beverage preferences but it will influence where consumers enjoy their favorite brands. Between 10 and 35% of consumers (depending on country and location of purchase/consumption) are seeking less expensive alternatives

Reasons to Purchase

• Mitigate the threats posed by an uncertain economic environment by understanding how consumers perceive and judge upscale alcoholic beverage brands
• Access unique consumer wealth and consumer survey data spanning Asia Pacific, Western Europe and the US
• Understand the most pertinent opportunities to drive brand and market growth in the alcoholic beverage sector