Premium Spirits Trending Upward

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Recent data shows how well spirits continue to thrive in the US, though not all categories are growing equally.

For the 7th consecutive year, distilled spirits gained dollar share of the total beverage alcohol category. Distilled spirits currently accounts for nearly 36%, with the share gains continuing to come almost entirely at the expense of beer, which currently stands at 47 percent. Each point of market share is worth approximately $700 million in supplier revenue.

Supplier sales were up 4.5% to $25.2 billion, and volumes were up 2.4% to 220 million cases, the Distilled Spirits Council (DISCUS) announced at its annual economic briefing for media and Wall Street analysts.

“The continued growth of the spirits sector clearly demonstrates that adult consumers’ taste for and interest in premium distilled spirits, across all categories, is trending upward,” said DISCUS CEO Kraig R. Naasz. “Spirits makers continue to develop new innovations to appeal to a growing audience of adult Millennials, and they are responding by purchasing and enjoying our products.”

American whiskey – bourbon, Tennessee whiskey and rye – continued to grow with volumes up 6.8% to 21.8 million cases, and revenues up 7.7% to $3.1 billion. Several other spirits categories performed exceptionally well in the US market.

Cognac volumes were up an impressive 12.9% to 5.1 million cases, while revenues grew 15.3% to $1.5 billion. Irish whiskey volumes leaped up 18.7% to 3.8 million cases as revenues grew 19.8% to $795 million. Tequila volume increased 7.1% to 15.9 million cases with revenues up 7.5% to $2.5 billion. And vodka volumes, which represent one-third of all spirits volumes, moved up 2.4% to 69.8 million cases with revenues up 4.1% to $6 billion.

Meanwhile, blended Scotch (-0.5%), rum (-0.2%) and cordials (-2.3%) all saw losses in 2016. Single malt Scotch barely ticked upward (+0.4%) while gin grew slightly overall, with significant growth at the high-end and super premium sectors (up approximately 10% and 12% respectively), offsetting the losses among lower priced products, a sign that on-premise trends are affecting a price shift among consumers.

The three fastest growing areas for spirits in terms of value? Super premium vodka (up $152 million), high-end Irish whiskey (up $124 million) and super premium Canadian whisky (up $114 million). Biggest losers were premium and high-end cordials (down $58 million and $20 million respectively), and high-end rum (down $14 million).

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