Spirits Growth Steady, Imported Beer Surges

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Imported beer is showing strong signs amidst a challenging era for big brands, but spirits have been the top performing category over the last 52 weeks according to research firm Nielsen.

In the latest four-week period ending in early December, distilled spirits dollar sales were up 4.3 percent. Strong performance in bourbon (up 7.8%), Canadian whisky (up 9.6%) and Irish whiskey (up 16.5%) continued. Tequila (up 5.9%) and vodka (up 4.6%) performed best among white spirits, while rum, gin and Scotch all underperformed the total category.

For the 52 week period, spirits volumes are up 1.8%, while dollar sales were almost double that, up 3.4%, as consumers continue to trade up to more premium products. Both beer (with a volume decrease of just over 3% and a value drop of 1.5%) and wine (down 1.3% in volume and .05% in value) continue to underperform.

But the Nielsen data reveals that beer hasn’t suffered uniformly across the entire category. For the fastest-growing subsegment, imported beer, volume sales were up 3.8% in the last 52 weeks, outperforming the total beer category. Import dollar sales have also outperformed total beer.

Nielsen posits that some of this growth is a result of a steady advance in distribution, with imported beer now stocked in 94% of all on-premise beer accounts, with the next highest footprint craft beer at 87 percent. More imported beer is being consumed per outlet as well; the average outlet that stocks imported beer is selling on average of six additional cases this year.

Drilling further down, the five fastest-growing imports are all Mexican brews, alone adding 2.7M cases to 52-week volume sales, worth an additional $300M.

"While spirits remain undoubtedly the strongest performing mega category in the US on-premise, Nielsen CGA OPM data for imported beer shows that growth opportunities do exist – even in a beer category showing consistent decline,” said Scott Elliott, SVP, Nielsen. “Imported beer seems to appeal to beer drinkers generally with 41% of domestic premium drinkers and 51% of craft drinkers choosing to drink imported at some point in their on-premise visits. For retailers, now that the trajectory of craft is slowing, a sweet spot exists between sessionability (i.e., rate of sale) and a premium price point. However, consumers need help in navigating the increasingly abundant choice in this market. Server recommendations, enhanced visibility and effective menu offerings are proven to work well in this space."

Results of the latest round of the Nielsen CGA On-Premise Consumer Survey (OPCS) show that Millennials make up the biggest demographic for imported beer drinkers. Compared to the average beer drinker, imported beer drinkers are younger, wealthier and more frequent visitors to on-premise operations for both eating and drinking occasions. According to Nielsen, more than half of Millennials drink out at least once a week, and on average do so on 9 occasions each month.

However, while Millennials are the most frequent users of the on-premise, they are also the most fickle. The average consumer of this demographic drinks across more categories than the average consumer, but one in four Millennials don't know what drink category they will consume prior to entering an on-premise venue.

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