The Polish alcoholic drinks market: big trends shaking up the sector
Published on 08/06/2017
Like many nations across Europe, Poland’s drinking culture is firmly entrenched in society. The average Pole consumes 10.67 litres of alcohol per year, placing them 14th on the WHO’s rankings of highest alcohol consumption per capita.
Poland’s close relationship with wines, beers, and spirits, can be seen in the steadily climbing sales from 2005-2015. From less than $500 million in 2005, sales peaked at just under $4.5 billion just two years ago.
But no market remains stagnant for long. Poland’s tastes, tipple-wise, are turning away from well-established product groups. One of the things that defines the Polish food and drink industry is consumer’s love of new products and flavours – a trend reflected across the alcoholic drinks sector.
As old favourites fall to the wayside, the Polish alcohol industry is shooting off in some interesting and exciting directions. Below, we have listed some of the hottest trends to help you navigate the market in these transitionary times.
Polish domestic vodka sales on the decline
Vodka, regarded as a traditional drink in Poland, remained one of the most popular alcoholic drinks in Poland, accounting for 30.7% of sales in 2014 - but it is struggling to maintain this market share.
Poles drank an average of 5 litres of vodka a year in 2016, according to Association of Employers of Polish Spirits Industry. However, vodka’s position as one of the most popular alcoholic drinks in Poland is under threat after excise duty was increased to 15% in 2014.
The vodka market is expected to suffer a continuous volume decline all the way until 2021, and is forecast to lose about 5 million cases of vodka over this timescale.
Domestic vodka market has not recovered from the dramatic decline throughout 2014—sales declined by 12 million bottles in 2016 compared to 2015 as consumers began to look elsewhere to explore other drinks. This decline is felt most strongly in the lower-end segment of the market.
As a result of declining sales in the domestic market, Polish vodka producers are increasingly looking outside of their home countries to markets that are more willing to pay more money for their products.
Vodka production increased by 3.4% year-on-year in 2016 compared to 2015, amounting to 98.2 million litres. Though the associations between vodka and Russia is very strong, Poland exported more vodka than Russia in 2015 and occupies the 4th biggest producer of vodka in the world, supplying roughly 7% of the global market with goods valued at $149.8 million, mostly going towards France and the United States.
Poles prefer premiumisation when it comes to spirits
Poland’s standard of living and disposable income levels are increasing annually rise, resulting in a growing middle and upper classes relative to the population. This market segment has more cash to spend when it comes to grocery shopping – and they are able to afford products considered a little more luxurious.
Some of the increased disposable income goes toward alcohol purchase and customers begin to look at top shelf products. Over 70% of Polish adults prioritise quality over quantity when buying spirits.
Sales of premium vodkas grew by approximately 6% despite the overall decline in the vodka market in 2016. There is also a thirst for alcoholic drinks branded as “prestigious”, such as whiskey and rum, evidenced by the increasing volume of imports in both these product categories.
Polish whiskey importers in high spirits
Thanks to declining vodka sales, importers have started buying greater volumes of premium, internationally sourced whiskies. Scotch whisky exports to Poland has grown by 60% in the last four years and is showing no signs of slowing down. Scotch whisky imports to Poland went up 15.8% in 2016 alone to 28 million bottles, making them among the biggest markets in the world for whisky.
The value of the whiskey market in Poland is estimated at $560 million, with 20% CAGR forecast all the way until 2020.
The fastest growth can be observed in single malt whiskies, which account for 38% value and 30% volume sales, followed by blended whiskies with 17% value and 22% volume according to Irish export organisation Bord Bia. The market for single malt whiskies is expected to continue growing at CAGR 19% until 2020 - one of the fastest growing in the world.
Ciders and flavoured beers gain market share
Historically, beers are the largest category in Poland’s alcoholic drinks market. Much like vodka, however, sales of beer are flagging and giving way to other brews. Cider sales are expected to grow as much as 28% in 2017 as Poles develop growing appreciation for dry ciders in addition to sweet ciders. Regional cider sales grew by a CAGR of 23%, in terms of total volume sales, in the 2010-2015 period, but Poland is leading the pack, accounting for 26% total volume sales in Central Europe.
This growth is rather remarkable, considering that in 2012 the Polish cider market was close to negligible. Market expansion has been heavily impacted by the Russian ban on Polish apple imports in 2014 as it pushed apple producers towards alternative sectors.
Record apple harvests and decreasing excise duties since 1 January 2013 further contributed to the situation, and by 2015 the Polish cider market was ranked 1st in the overall Central European region.
Domestic mid-priced lagers are struggling to retain volume sales and a dominant place in the market, as consumers are expected to switch to lighter alcoholic drinks such as ciders and flavoured lagers.
Craft beers, including flavoured beers and non-alcoholic beers brewed with spices or other add-ons, is also a rapidly growing market segment in Poland, experiencing double-digit growth year-on-year. This sector rose by 16% in 2016.
Raise a glass to the Polish alcohol sector at WorldFood Warsaw 2018
WorldFood Warsaw, Poland’s premier food and drink exhibition, is the only place to connect with the nation’s leading alcohol importers, retailers, and other major beverage buyers. 2017’s event attracted over 4,000 dedicated food and drink professionals looking to source new products and meet new suppliers – and WorldFood Warsaw 2018 will be bringing more of the same back to Poland’s capital.
The event also features a unique business matchmaking service between exhibitors and potential buyers, distributors, or retail representatives – making it the ideal platform to meet and network the key decision makers of one of EU’s leading markets.
Contact us today to book your stand.