Drinkers in Malta increasingly swapped champagne for vodka and other spirits last year, according to a recent report from an international drinks analysis company.
Consumers were persuaded to spend more money on vodka and whiskey as producers positioned their products as more premium, while consumers appeared to prioritise quality over quantity, the report from IWSR said.
The “premiumisation” of whiskey and vodka attracted consumers away from champagne, which also faced challenges from supply issues, rising prices and the rising popularity of prosecco.
Meanwhile, champagne proved less popular in the bar and the boardroom, with the report noting that “consumers in nightclubs preferred spending money on premium spirits such as vodka for the same price” while corporate sales also declined.
The drinks market in Malta continued to grow overall last year driven by tourism and increased local consumption throughout the summer but not at the same rate as the year before.
Customers had less money in their pocket due to food inflation while “media coverage of unfavourable economic conditions” weakened consumer confidence, the report said.
High-spending consumers leave
It noted there had been an increase in the number of Maltese high spenders leaving the country in the last three months of the year. And while tourism helped boost drinks consumption, the average spend and length of stay were less than pre-pandemic levels, with a reduction in tourists from the UK – noted as high spenders – also mentioned.
Gin and spritz – comprising prosecco, a bitter such as Aperol or Campari and soda water – continued to grow in popularity, while vodka was increasingly the nightlife drink of choice.
Meanwhile, cognac’s association with hip-hop was attributed as being partly responsible for the growing popularity of brandy.
Wine sales, however, “remained stagnant” while beer and spirits saw “steady growth”, the latter fuelled by the rising popularity of cocktails which, while seeing a shift towards simpler recipes, proved popular for home drinkers as well as those on nights out.
Local craft beers soar
Another impact of cocktails being favoured more by consumers was the growth of ready-to-serve cocktails, which the report said had become increasingly popular in response to a shortage of bar staff.
While beer mostly saw growth across the board, craft beers proved particularly popular, with Lord Chambray seeing the highest growth out of the beers brewed locally. Stretta, another popular local brand but brewed abroad, meanwhile, registered the highest growth out of all beers included in the report while Cisk, a lager that is Malta's most popular beer, saw slower growth.
Supermarkets also played an active role in the drinks market, with “intense competition” seen between retailers who increasingly bypassed distributors to source directly from producers, a practice seen in the restaurant industry too but to a much lesser extent.
Price wars predicted
IWSR predicts future growth to be dampened overall due to higher prices, with bar consumption facing issues due to staff shortages, higher rents and low tourist spending in the short term. Meanwhile, the retail sector is “likely to see price wars with the arrival of the Eurospin supermarket chain in Malta”, the report said.
According to World Health Organisation (WHO) data published in 2019, Malta saw the third highest growth per capita in alcohol consumption in the EU between 2010 and 2016, rising by 1.1 litres.
Meanwhile, an Organisation for Economic Cooperation and Development (OECD) review in 2021 found people over 15 in Malta drank roughly eight litres of pure alcohol per year, equivalent to more than three litres of beer every week.
The IWSR Executive Summary 2023 report for Malta was compiled using shipment data, company reports where available, store checks in August last year and face-to-face and remote meetings with local importers and producers and other industry stakeholders.