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A dynamic category
Spirits sales are facing steep declines in Germany—falling 7.1% by value in the 12 months to December 2024 and 5.5% in volume sales. Vodka (-11%), brandy (-17.4%), white rum (-13.2%), and gin (-8.0%) are experiencing particularly sharp drops. However, the On Trade remains a key player in the German spirits market, accounting for 54.5% of all consumer spending on spirit beverage alcohol.
Amidst declining category performance, influenced by shifting consumer expectations and rising price sensitivity, the On Trade remains a critical space for brand owners to build equity and foster long-term consumer loyalty.
Value perception of the spirits category is driving consumers to other beverage categories when out of home. Spirit drinkers (43%) believe the cost-of-living crisis is severe or moderate. The average price per 30ml has risen by 9.3% since 2022, which has contributed to spirits consumers average spend dropping -5.6. Over a third of consumers who plan to reduce the frequency that they order spirits attribute this to them becoming too expensive, and a quarter say that they choose more value/cheap drinks instead. Categories like Beer, wine, and cocktails will benefit from this movement away from spirits.
Cocktail Opportunities
Although consumers are moving away from traditional spirits serves, they remained engaged with cocktails throughout the year. Twice as many consumers choose cocktails than neat spirits, or spirits with a mixer, when ordering in cafes, bars, restaurants or similar venues. In fact, 32% of consumers who tried new drinks in the past month report trying a new cocktail. Consumers rank cocktails higher the spirits in satisfaction across a range of factors including, value for money, excitement, and serve quality. Suppliers can incentivize operators to promote the cocktail serve to capitalise on the trend.
The aperitif category is an outlier in the spirits landscape, with double-digit growth across both volume (+10.4%) and value (+13.3%) in 2024. Consumer research shows that more consumers are drinking aperitif, raising by 3 percentage points compared to 2023, driven by a desire for lower ABV options. The category shows no signs of slowing down in popularity as consumers have voted four aperitif drinks among the top five trending mixed drinks of 2024.
Measuring the Spirits market
CGA by NIQ’s On Premise Measurement provides a first-of-its-kind solution to these challenges, by delivering in-depth volumetric measurement of spirit sales across all On Trade channels, from bars and pubs to fine dining restaurants. Spirits manufacturers get clear and actionable views of their market share, identify regional growth opportunities, analyse category dynamics, and benchmark performance against competitors.
The full suite of CGA’s market measurement solutions allows manufactures, brands and operators to access The Full View™ of the On Trade market. From granular outlet-level data that reveals how, when, and at what price brands and categories are being consumed, to competitive rate-of-purchase comparisons across channels and regions, CGA equips brands with the intelligence they need.
Miriam Stirnimann, CGA by NIQ Client Success and Insight Manager, said: “Spirits sales in Germany are facing significant declines, driven by consumers’ perception of value, a growing focus on lower ABV drinks and health trends, and the broader challenges posed by the rising cost of living. Despite these challenges, there are promising opportunities for spirits manufacturers to capitalize on the increasing popularity of cocktails and spritzes as we move into the summer months. By leveraging these trends, brands can protect and potentially grow their market share within the On Premise sector, ensuring they remain competitive and relevant in a shifting landscape.”
Miriam Stirnimann, CGA by NIQ Client Success and Insight Manager, said: “Spirits sales in Germany are facing significant declines, driven by consumers’ perception of value, a growing focus on lower ABV drinks and health trends, and the broader challenges posed by the rising cost of living. Despite these challenges, there are promising opportunities for spirits manufacturers to capitalize on the increasing popularity of cocktails and spritzes as we move into the summer months. By leveraging these trends, brands can protect and potentially grow their market share within the On Premise sector, ensuring they remain competitive and relevant in a shifting landscape.”
Discover the perfect measure with CGA by NIQ’s full market measurement solutions. From pinpointing your market share and growth regions to benchmarking brand performance and uncovering untapped distribution opportunities, OPM provides the data you need to dominate your category. Compare performance year-over-year, analyse regional dynamics, and pinpoint where to focus for maximum impact. Take the guesswork out of your On Premise strategy— get in touch to see how OPM can redefine your success in Germany’s beverage market, click here.
Source: NIQ and CGA Total Trade Measurement, On Premise Measurement (OPM) MAT to 28.12.24, REACH, OPUS Germany, Germany Consumer Pulse
