Alex Oldroyd: Global Spirits Market Overview
Managing Director, Fluxion Advisors
Alex, a previous speaker at the Gin Guild’s Ginposium event offers an overview of the industry to give a bigger perspective and what public and private investors look at when considering the products that they want to get involved in the spirits market.
With distillers making the plunge and taking risks into this industry, this presentation looks at some of the economics around what makes the spirits industry interesting about how financial markets look at spirits companies and value them.
The sector is competing against beer and wine and the broader consumer basket, and in the current environment, at the standard classification of nondurable goods that consumers buy in the shopping basket. Alex takes into consideration the current environment broadly, with energy prices going up, mortgage rates going up, and distillers competing for very precious pounds, dollars, and other currencies.
The market is still recovering from the global pandemic, with about 9% of total consumer expenditure before covid due to the collapse in the on-trade and the slowdown of the bars, restaurants, and the travel retail channel.
The encouraging point is that over the last 20 years and despite the global financial crisis in 2008, the spirits industry has generated annually one to two points better organic sales growth, which means a good starting point for everyone setting up a business or looking to invest in a business. However, lately, the industry is more volatile.
In this presentation, Alex explains the competitive landscape of the spirit industry, the structural growth industry with cyclical bumps and mapping recovery, the global alcohol trends, consumption and expenditure by countries and age segments and the economics that makes the industry so attractive for investors and expanded valuations, focusing in the main spirits: whisk(e)y, vodka, bourbon, tequila, rum, gin and even baijiu and all their segments, including premium and luxury products.
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