Alcoholic Drinks - Iceland

The Alcoholic Drinks market in Iceland has experienced significant growth in recent years, driven by changing customer preferences, emerging trends, and local special circumstances.

Customer preferences: Icelandic consumers have shown a growing preference for premium and craft alcoholic beverages. They are increasingly seeking unique and high-quality products that offer a distinct taste and experience. This shift in preferences has led to an increase in demand for artisanal beers, small-batch spirits, and locally produced wines. Consumers are also becoming more health-conscious, leading to a rise in demand for low-alcohol and non-alcoholic options.

Trends in the market: One of the key trends in the Icelandic Alcoholic Drinks market is the rise of microbreweries and craft beer. These small-scale breweries offer a wide variety of flavors and styles, appealing to consumers who are looking for new and unique taste experiences. Craft beer festivals and events have also gained popularity, providing an opportunity for consumers to explore different brews and engage with local brewers. Another trend in the market is the growing popularity of Icelandic spirits, particularly vodka and gin. Icelandic vodka is known for its purity and smoothness, while Icelandic gin often incorporates local botanicals and herbs, giving it a distinct flavor profile. These spirits have gained recognition both domestically and internationally, attracting tourists and enthusiasts alike.

Local special circumstances: Iceland's unique geography and natural resources play a significant role in shaping the Alcoholic Drinks market. The country's pristine water sources are essential for producing high-quality beverages, particularly vodka and beer. Additionally, Iceland's volcanic activity has led to the emergence of geothermal spas, which have become popular tourist attractions. This has created a demand for locally produced spirits and cocktails that incorporate Icelandic ingredients and flavors.

Underlying macroeconomic factors: Iceland has experienced a steady growth in tourism over the past decade, which has had a positive impact on the Alcoholic Drinks market. The influx of international visitors has increased the demand for locally produced beverages, providing opportunities for both established and emerging players in the market. Additionally, Iceland's strong economy and high disposable income levels have contributed to the growth of the premium segment within the Alcoholic Drinks market. In conclusion, the Alcoholic Drinks market in Iceland is evolving to meet the changing preferences of consumers. The rise of craft beer, the popularity of Icelandic spirits, and the emphasis on local ingredients and flavors are all contributing to the growth of the market. Furthermore, Iceland's unique geographical features and robust tourism industry are creating favorable conditions for the development of the Alcoholic Drinks market.

Data coverage:
The data encompasses B2C enterprises. The at-home market covers retail sales via super- and hypermarkets, eCommerce, convenience stores, or similar sales channels. The out-of-home data encompasses all sales to hotels, restaurants, catering, cafés, bars, and similar hospitality service establishments. Combined numbers encompass both the at-home market and the out-of-home market. Both the at-home and the out-of-home market are valued at retail selling prices including all sales and consumption taxes.

Modeling approach:
Market sizes are determined through a Top-Down approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use resources from the Statista platform as well as in-house market research, national statistical offices, international institutions, trade associations, companies, the trade press, and the experience of our analysts. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending (e.g. consumer spending on alcoholic beverages, consumer spending at Hotels, Restaurants etc.), and price level index. This data helps us estimate the market size for each country individually.

Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing is well suited for forecasting the Alcoholic Drinks market with a projected steady growth. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:
The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level.