Alcoholic Drinks in the Philippines

Abstract

Why buy this report

• Get insight into trends in market performance
• Pinpoint growth sectors and identify factors driving change
• Identify market and brand leaders and understand the competitive environment

Product coverage

Beer; Cider/perry; RTDs/High-strength premixes; Spirits; Wine

Executive summary

2007 is a Comeback Year for Alcoholic Drinks

The consumption of alcoholic drinks in Philippines in 2007 recorded dynamic volume growth. This growth was an optimistic pointer for manufacturers, after the slow volume growth in 2006 that was due to the increase in VAT. Although excise tax was further increased in 2007, it did not deter Philippine consumer consumption. This was due to several factors, such as improved economy, and it was also election year.

Spirits and Beer Promotion Boosts Overall Growth in Alcoholic Drinks

Beer and spirits were the largest contributors in alcoholic drinks in Philippines in 2007. Key manufacturers, such as San Miguel Corp, Tanduay Distillers Inc and Emperador Distillers Inc, promoted aggressively to entice increased drinking by Philippine consumers. There was a clear push to shift consumers from one type of drink to another, such as spirits against beer or brandy against gin, where drinks' consumption was relatively mature. On the other hand, the promotions of wine and RTDs/High-strength were relatively quiet compared to those for spirits and beer.

Smaller Domestic Companies Gain Prominence

San Miguel Corp continued to be the leading player and the key manufacturer in 2007. It was the organisation that other smaller and emerging brewers and distillers were trying to topple. Smaller domestic companies, such as Emperador Distillers -- a subsidiary of Consolidated Distillers of the Far East Inc -- was notably successful in its bid to increase its position in alcoholic drinks in Philippines. This was due to its improved marketing strategy and enhanced product offering.

Traditional Channels Remain the Chief Conduits of Distribution

With domestic beer and spirits remaining the dominant alcoholic drinks of choice in Philippines in 2007, sari-sari stores and independent food stores continued to be the preferred channels as points of purchase. Their importance was exceptionally pronounced in the suburbs and rural areas where there was absence of widespread presence of modern retailers such as supermarkets/hypermarkets. On the other hand, alternative channels such as specialists gained visibility over the review period. This was due to their efforts to expand their reach to smaller cities in Philippines.

Alcoholic Drinks Expected to Be Positive over the Forecast Period

Despite the current uncertain outlook for the Philippines' economy, consumption and sales of alcoholic drinks are projected to expand positively over the forecast period. With increasing disposable incomes, a young demographic population will evolve. This, together with the emerging influence of Western drinking and pub culture, will collectively act to positively increase alcoholic drinks in the country. In terms of types of alcoholic drinks, beer and spirits will continue to comprise the largest volumes. Wine and RTDs/High-strength premixes, however, will lead the volume growth charge.