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The spirits market is split in two: premium products are driving Zwack’s growth – Italians love Unicum, but its reputation is spreading elsewhere as well.
The Hungarian spirits market is split in two: while volume is stagnating, demand for premium products is growing, a trend that is already clearly reflected in sales revenue. Revenue from Zwack’s own premium products grew by more than 11%, even as cost pressures and geopolitical risks intensify. Exports remain a minor factor, but the company sees growth opportunities in Italy and the region.
The Hungarian spirits market has split spectacularly in recent years, said Csaba Belovai, the new CEO of Zwack Unicum Nyrt., in an interview with Világgazdaság. In his opinion, while the total market volume is stagnating, the performance of the various categories varies significantly. He emphasized that a clear shift toward quality products can be observed, which even allows for revenue growth exceeding inflation. This is supported by Zwack’s data, as revenue from its own premium products increased by more than 11%.
Belovai emphasized that consumers are increasingly following the “less but better” principle, meaning they shop less frequently but prioritize quality when they do. This trend is also evident in the super-premium segment, where demand for Unicum, Unicum Riserva, and the limited-edition Unicum Trezor XO has remained stable despite fluctuating purchasing power. Meanwhile, the premium bitter category has expanded significantly, while the gin market has declined for the first time in many years.
Belovai pointed out that although nearly 90% of revenue still comes from the domestic market, expanding exports is a primary strategic goal. The most important focus markets are Italy, Germany, and Romania, where they see the greatest growth potential. He emphasized that Italy is the most mature foreign market, where, based on dedicated research, they tailor communication and new products to local needs.
In addition, they see significant opportunities in Romania and Slovakia as well, since the development of culinary culture favors herbal liqueurs.
At the same time, he cautioned that significant investments are required for spectacular volume growth, and results also depend on the economic performance of the respective countries; nevertheless, they remain committed to strengthening their international presence.
Regarding cost pressures, Belovai noted that fluctuations in energy prices, as well as rising costs for glass and agricultural alcohol, posed a serious challenge, to which they responded with an efficiency improvement program. As part of this, they installed a solar park in Dunaharaszti (near Budapest) and are continuously optimizing energy consumption and manufacturing processes.
He added that although they were forced to raise prices, they kept the increases below inflation, while the growing share of premium products improved profitability. Operating profit grew steadily despite the challenges. At the same time,
he highlighted energy price trends, rising logistics costs, and the continued increase in the price of glass bottles, as well as a decline in consumption due to general inflation, as risks.
Speaking about the effects of international tensions, he stated that Zwack primarily feels the impact through fluctuations in energy prices and exchange rates. Since nearly 80% of Unicum exports are destined for European markets, the direct impact of conflicts further afield remains moderate for now; however, the company expects logistics costs to rise in the second half of the year.
He emphasized that the supply chain is stable, as the company works with multiple suppliers, so the supply of raw materials has not been jeopardized. The experience gained over more than two hundred years of operation helps in managing crises and ensures long-term stability, he added.
As Belovai sees it, tourism has a direct and distinctly positive impact on sales, particularly through the growth of experience-based tourism in Budapest. This is evident not only in the hospitality sector but also in airport sales. At the same time, he cautioned:
hospitality venues are highly exposed to tourism, so a potential downturn could also reduce consumption of premium beverages.
Via Világgazdaság; Featured image: Globetrotter19, Wikimedia Commons
The post Zwack Unicum Liquor is Conquering the Market with the Fusion of Tradition and Innovation appeared first on Hungary Today.
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