The liquor industry outlines the trade and sale of alcoholic beverages after the distillation of sugar, fruits, vegetables, and grains, which have gone through the process of alcoholic fermentation. Some of the synonymous terms for liquor and alcoholic beverages are hard liquor, spirituous liquor, and spirit. Today, we’ll discuss the PESTLE analysis of Liquor Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Liquor Industry
Some of the main political factors in the Liquor Industry PESTLE analysis are as follows;
I-Government Regulations
The consumer protection government regulations are very strict and tight for the Liquor Store Industry. They focus on health and safety regulations, consumer protection laws, production laws, labor laws, ingredient disclosure, licensing agreements, and others. However, the goal of strict regulations and policies is to ensure the production of healthy and safe drinks and protect the interests of ordinary consumers.
II-Licensing Requirements
Usually, it is mandatory for Liquor Stores to earn a license from the local and state governments for the production and retail sale of alcoholic beverages. The liquor stores need to pay the annual licensing fee and pass the clearance test based on the safety inspections. However, the licensing fees and the inspection criteria are different for various countries and states. The Liquor Stores should be familiar with the laws and regulations of different states and countries.
III-Political Stability
The stable political environment of the country plays a key role in the growth of businesses and companies. Liquor Stores procure ingredients from various countries and regions across the globe for the production and distillation of alcoholic beverages. In case of political turmoil, roadblocks, processions, and other violent activities, then it disrupts production and other retail operations.
Economic Factors Affecting Liquor Industry
Some of the main economic factors in the Liquor Industry PESTLE analysis are as follows;
I-Economic Growth
According to an estimate, the liquor industry has reached approximately 28 billion USD by the end of 2023 with a growth rate of 4.3%. It presents a great growth opportunity for alcoholic beverage companies to expand their business operations into new regions and markets. It allows them to increase their revenue, sales, and profitability.
II-Spending Habits
Consumer spending habits within the particular economy play a key role in the growth and development of businesses and companies. The average disposable income of ordinary Americans has increased significantly in recent years. When people have sufficient disposable income, they’re willing to spend it on luxury food and drink items like alcoholic beverages.
III-Competitive Environment
The Liquor Store Industry has become highly competitive in recent years with multiple liquor store brands in various countries. The Liquor Stores need to do something creative and innovative by offering unique tastes and flavors to the customers based on their needs and demands. The unique and innovative flavor would help them to gain a competitive edge in the market.
Social Factors Impacting Liquor Industry
Some of the main social factors in the Liquor Industry PESTEL analysis are as follows;
I-Consumer Trends and Preferences
The needs and preferences of the customer market keep changing over time due to various social and regional factors. According to an estimate, approximately 58% of Americans prefer artisanal and craft beers and alcoholic drinks and beverages for customers. The Liquor Stores should be familiar with the trends and preferences of the customer market, it allows them to amplify their customer market reach, network, and sales.
II-Health Consciousness
The consumer market has become highly cautious about their health, diet, and the type of food they’re putting into their bodies. According to an estimate by Gallup Poll, 60% of the consumers prefer healthy food and diet and they prefer low-sugar and low-calorie food and drinks. Liquor Stores should develop and offer low-calorie and low-sugary food items to the customers relevant to their needs and preferences.
III-Social Responsibility
Along with healthy dietary trends, the consumer market has also become cautious about their food and drink choices; they’re saying no to alcoholic drinks. According to an estimate, 29% of people have decreased the consumption of alcoholic drinks and beverages for health and safety reasons. It allows them to maintain control over their sanity and senses.
Technological Factors Affecting Liquor Industry
Some of the main technological factors in the Liquor Industry PESTEL analysis are as follows;
I-E-commerce Platform
Online shopping and e-commerce platform growth have increased a lot in recent years. Liquor Stores and Liquor Brands have established their online store and e-commerce platforms to target online shoppers with home delivery service options. The goal is to offer a seamless shopping experience to the customers.
II-Digital Marketing
Along with building an online liquor store, they run various types of marketing and advertisement campaigns over social media platforms. They employ various digital and social media channels to target various segments of the customer market. It allows them to amplify their customer market reach, network, and sales.
III-Inventory Management System
Inventory and warehouse management is a great headache for businesses and companies, Liquor Stores are no different. The Liquor Stores companies employ the latest inventory management system in their warehouses. However, it allows them to efficiently manage the stock-in and stock-out inventory to avoid the over-stocking and under-stocking issues.
Legal Factors Impacting the Liquor Industry
Some of the main legal factors in the Liquor Industry PESTEL analysis are as follows;
Regulatory Compliance
The Liquor Store companies need to comply with the government regulations of different countries. They comprise liquor production and liquor sale licenses, labor laws, health and safety policies, ingredient disclosure, testing and inspection requirements, and other policies. The regulatory compliance would help them to smoothly perform their operations with limited delays and disruption.
Environmental Factors Affecting Liquor Industry
Some of the main environmental factors in the Liquor Industry PESTEL analysis are as follows;
Sustainability Initiative
Liquor Store companies need to make a strong commitment to environmental sustainability initiatives. It comprises of employing renewable sources of energy, disposable packaging, and others. The sustainability initiative would help them to keep up with the growing environmental sustainability customer market trends.
Conclusion: Liquor Industry PESTLE Analysis |PESTEL Analysis of Liquor Industry |External Environmental Analysis of Liquor Industry | Strategic Analysis of Liquor Industry
After an in-depth study of the pestle analysis of Liquor Industry; we have realized that Liquor Industry is the world’s top-growing business market. If you are learning about the Liquor Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
