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The global pisco market size stood at USD 670.5 million in 2019 and is projected to reach USD 1,057.8 million by 2027, exhibiting a CAGR of 6.2% during the forecast period.
Made by distilling fermented grape juice, pisco is a type of brandy produced only in Peru and Chile. It originated around the 16th century and has established itself as a popular distilled spirit in the emerging cocktail industry. The growing demand from consumers for flavorful and innovative spirits has contributed to market growth. The manufacturers are infusing softer and subtler flavors to give the spirit a delightful and unique profile. The increasing awareness among the consumers about this exotic alcoholic beverage is anticipated to proliferate its demand in the global marketplace during the forecast period.
Closure of Bars and Restaurants amidst COVID-19 to Hamper Growth
The global outbreak of COVID-19 has forced various governments to impose strict lockdowns, leading to the closure of bars, taprooms, and restaurants to ensure physical distancing. According to the National Restaurant Association survey, restaurants in the U.S. reported losses worth USD 30 billion in March due to the closure of restaurants and bars by the government to contain the spread of the virus. Similarly, in the U.K., according to the Morning Advertiser, nearly 7000 bars across the country are fearing the possibility of closure due to the lockdown imposition. These closures along with the shortage of labor have negatively impacted the production as well as the consumption trends of pisco. Transportation delays have disrupted the regional as well as global traffic, impacting the international supply chains. According to the Pan American Health Organization (PAHO), alcohol consumption is expected to be heavily reduced in 2020, owing to the increased health concerns among consumers.
However, the global pandemic situation is gradually getting under control, which has slowly led to the normalization of transportation and logistics operations. Thus, the market is expected to gain prominence in the forthcoming years owing to the opening of bars and restaurants.
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Increasing Trend of Blending Various Spirits to Offer Hybrid Alcoholic Cocktails to Boost Growth
The growing trend of fusing various spirits to devise new cocktails, which refers to merging different flavors in order to serve unique alcoholic beverages, is driving the market. This has led many manufacturers to come up with novel cocktails such as Pisco Sour, El Capitan, and The Chilcano, which have drawn consumer attention worldwide. The hybrid spirits are an attempt to push the boundaries of alcohol innovation and encourage the exploration and expansion of conventional alcoholic drinks categories. Along with this, many countries host various drinking festivals to promote traditional drinks such as pisco. For instance, in December 2017, Delhi and Mumbai hosted The Piscois Peru Festival, an event to promote the versatile drink and introduce new exotic cocktail variants to the consumers. This in turn is expected to develop consumer interest in pisco and fuel market growth.
Growing Popularity of Traditional Spirits to Enhance Market Performance
The increasing popularity of traditional spirits among drinkers has influenced the increase in demand for pisco. Alcohol consumers all around the world are demanding such exotic drinks for the unique experience they offer, which is propelling the alcohol industry. For example, according to the Distilled Spirits Council of the United States (DISCUS), the spirit industry in 2019 experienced accelerated growth, with suppliers’ sales increasing by 5.3% and volumes rising by 3.3%. The spirits segment gained a considerable share in the market with sales rising to 37.8% of the overall alcoholic beverage sales.
Rising Demand for Premiumize Drinks to Support Market Expansion
Increasing westernization and rising incomes around the globe have promoted premiumization in the alcoholic beverages industry. According to DISCUS’s chief economist, the major revenue growth in the global alcoholic beverages industry is mainly achieved due to the rising consumption of high-end premium spirits. For instance, Radico Khaitan Ltd., the brand manufacturing Magic Moments Vodka, has said that the affluence of the middle-class will drive up the premium spirits market by 10% in India and other Asian countries. Thus, the growing demand for such drinks is expected to expand the global market.
Consumer Inclination towards Low Alcoholic Beverages to Dampen Market Growth
The increasing awareness among the consumers about the detrimental effects of alcohol on health has led them to shift towards zero and low alcohol-by-volume (ABV) beverages. According to the Centers for Disease Control and Prevention, consumption of alcohol can lead to chronic health ailments such as high blood pressure, kidney disease, and high risk of cancer. The National Institute on Alcohol Abuse and Alcoholism states that approximately 95,000 people died due to alcohol-related problems in the U.S. Furthermore, consumers are becoming more health-conscious and are adopting products with high nutritional benefits to avoid such health issues. Along with this, various alcoholic beverage manufacturers are introducing new variants of low-alcohol beverages to attract new consumers, which in turn is impeding the market growth.
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Chilean Segment to Account for the Major Market Share
The Chilean origin segment holds the major market share owing to its authentic taste offerings and availability in the major pisco markets across South America and Europe. According to Chile’s Ministry of Production, the country produces around 35 million liters of pisco every year and delivers it to more than 20 countries around the globe. However, the export quantity was recorded as low and the manufacturers are focusing on increasing the production and exports to the global marketplace.
On the other hand, Peruvian pisco is mostly consumed outside of South America and has an immense potential to gain traction in developed markets.
Acholado to Emerge as the Fastest Growing Variant; Puro to Dominate Worldwide
Acholado, which translates to ‘half-bred’, is made by blending several varieties of grapes before the juice is set to rest in the stills. The grape varietals are fermented separately and the longer the varietal is fermented, the stronger the taste it imparts in the drink. This results in unique and flavorful blends that are driving this segment. Millennials and youngsters are demanding such aromatic variants in the market.
However, the puro segment holds the major share in the global market owing to the offerings of exotic and traditional tastes to the professional drinkers in Chile and Peru.
South America Pisco Market Size, 2019 (USD Million)
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South America is expected to dominate the market share owing to the presence of the two main pisco producing countries: Peru and Chile. The market is mainly driven by the reinvention of the spirits category by the major producers in the region. According to Pisco Chile, an organization that represents all the distilleries present in the country, the market has undergone a profound evolution in the last few years and nearly 70% of the categories comprise premium and ultra-premium labels. Along with this, the manufacturers are expanding their exports as well as coming up with new and innovative cocktail ideas for exploring the untapped potential and promotion of these spirit varieties, thereby fueling the regional market growth.
Following South America, Europe is estimated to hold the second-largest share in the market and retain its position throughout the forecast period. The growing popularity of traditional spirits in countries such as the U.K., Russia, and Germany has positively impacted market growth. Further, according to the Association of Peruvian Exporters, there has been an increase in the Peruvian flagship product imports to Russia, which has also contributed to the improved regional market performance.
In Asia Pacific, pisco has grown widely popular among consumers in major countries such as India and China owing to the increasing cultural understanding between these countries and Peru. Further, increasing trade activities to explore the untapped opportunities presented by Latin America opens new avenues for the market to grow in the region.
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Dominant Players to Focus on Launching New and Innovative Variants to Expand their Business
Companies such as Pisco Portón, Macchu Pisco, Barsol Pisco Perola GmbH, La Diablada Pisco, and Cooperativa Agricola Pisquera Elqui Ltda are focusing on new product developments and increasing their exports to expand their businesses. The market represents a consolidated structure due to the concentrated production of the drink in Chile and Peru along with the presence of key players exporting and launching their products worldwide.
An Infographic Representation of Pisco Market
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The pisco market research report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of the market size and growth rate for all possible segments in the market. Various key insights presented in the report are an overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.
Value (USD Million)
By Origin, Type, and Geography
Fortune Business Insights says that the global market size was USD 670.5 million in 2019 and is projected to reach USD 1,057.8 million by 2027.
Growing at a CAGR of 6.2%, the market will exhibit moderate growth in the forecast period (2020-2027).
The Chilean segment is the leading segment based on product type in the market.
The increasing popularity of traditional spirits among consumers is expected to drive market growth.
Pisco Portón, Macchu Pisco, Barsol Pisco Perola GmbH, La Diablada Pisco, and Cooperativa Agricola Pisquera Elqui Ltda are the key players in the market.
South America dominated the market share in 2019.
The puro segment is the leading type segment in the global market.
New product launches and expanding trade between countries are the key market trends that are driving market growth.
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