Spirits - Laos

The Spirits market in Laos has been experiencing steady growth in recent years.

Customer preferences: Laotian consumers have shown a growing interest in spirits, particularly in the premium and craft segments. This can be attributed to several factors. Firstly, there is an increasing disposable income among the middle class, which allows them to indulge in higher quality and more expensive spirits. Secondly, there is a growing trend of socializing and entertaining at home, which has led to an increased demand for spirits for personal consumption and for hosting guests. Lastly, there is a rising interest in exploring new and unique flavors, leading consumers to seek out craft spirits that offer a more artisanal and distinct taste.

Trends in the market: One of the key trends in the Spirits market in Laos is the rise of locally produced spirits. Domestic distilleries have been gaining popularity as consumers seek out products that are made with local ingredients and reflect the unique flavors of the region. This trend aligns with the global movement towards supporting local businesses and consuming products that have a smaller carbon footprint. As a result, there has been an increase in the number of craft distilleries in Laos, offering a wide range of spirits such as gin, rum, and vodka. Another trend in the market is the growing demand for premium spirits. As mentioned earlier, the rising disposable income among the middle class has allowed consumers to trade up to higher quality and more expensive spirits. This trend is not unique to Laos, but is seen worldwide as consumers become more discerning and willing to pay a premium for products that offer superior taste and quality. Premium spirits are often associated with luxury and exclusivity, making them desirable for consumers who want to elevate their drinking experience.

Local special circumstances: Laos is known for its rich cultural heritage and traditional practices, which also influence the Spirits market. For example, the consumption of rice wine is deeply ingrained in Laotian culture and is often associated with celebrations and special occasions. While rice wine is not classified as a spirit in the traditional sense, it is an important part of the local drinking culture and contributes to the overall demand for alcoholic beverages in Laos.

Underlying macroeconomic factors: The growth of the Spirits market in Laos can be attributed to several macroeconomic factors. Firstly, the country has been experiencing steady economic growth, which has led to an increase in disposable income and consumer spending. This has created a favorable environment for the spirits industry to thrive. Secondly, the tourism sector in Laos has been growing rapidly, attracting a large number of international visitors. This has contributed to the demand for spirits, as tourists often seek out local alcoholic beverages as part of their cultural experience. Lastly, the government's efforts to promote investment and improve infrastructure have also played a role in the growth of the spirits market, creating a more conducive business environment for both domestic and international players.

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.