According to its annual Millionaires ranking, which tracks spirits with sales of more than one million 9-litre cases a years, Euromonitor said total sales of international brands on the list fell by 5 per cent while domestic and local brands enjoyed 6 per cent growth.
This retreat of the big brands comes in the wake of the recession and its negative effects on consumer habits and spending. However, Euromonitor now expects the downward pressure to ease and volumes to recover helped on by the emerging markets of Latin America, Asia-Pacific and Eastern Europe.
Euromonitor analyst Jeremy Cunnington said: “Signs of economic recovery in the first half of 2010 will undoubtedly help international brands bounce back.
“However, many core markets for these brands, especially in Western Europe, could still hold back growth as governments and consumers continue to restrict spending to reduce their high levels of debt”.
In 2009, this sluggishness in the market pushed some brands off the Millionaires list as consumers traded down and went out less. For example, Pernod Ricard, which remains the company with the most brands in the ranking, lost Presidente brandy and Luksusowa vodka from the 162-strong list.
Trading down
Cunnington said it was the more expensive brands that lost volume in 2009 while economy brands like Label 5 whisky benefited from some trading down. He said this trend was particularly seen in the US market for vodka where premium international brands lost out to cheaper alternatives.
Domestic and local brands also had a good year in competition with their international rivals. Driving their growth internationally was the strength of the spirits market in Asia-Pacific where local brands account for over 40 per cent of total brand volumes.
However, as the spirits market develops in the Asia Pacific, international brands are expected to find opportunities for growth. For example, in South Korea where local soju brands currently dominate the market, Euromonitor said there is good potential for international rivals to attract new consumers like female professionals interested in cocktails.