US Spirits Market to Grow, Taco Bell to Enter Market

Image Source: NBC News

Good news for spirit sellers: the U.S. spirits market is expected to expand once again this year, for the 20th consecutive year. And recent sales data indicates that while on-premise traffic and sales are still soft, they are an improvement over the year-to-date trends.

Impact Databank reports most of the spirits market’s growth can be attributed to projected growth from flavored whiskies, cognac, bourbon, Irish whiskey, super-premium tequila and single malt Scotch. Declines are expected from blended whiskies, gin, rum and imported vodka. The Databank report also indicated that wine is projected to increase only by the smallest of percentages while beer is expected to decline slightly.

Research firm Guestmetrics’ latest report says spirits unit growth was down marginally during the last 4 weeks, but above the year-to-date trend, and spirits grew in value by 1.3 percent, as price/mix continues to be a positive contributor. Segments gaining share during the 4 weeks were tequila, Irish whiskey, vodka, gin, and brandy. Notably, domestic craft spirits year over year share increased to 3% over the latest 4 weeks versus 2.7% YTD. Spirits unit share of alcohol gains increased from +0.8% YTD to +1.3% over the latest 4 weeks. Beer unit share was down 1.0% during the latest 4 weeks (weakening from down 0.8% YTD). Wine share was down 0.3% (vs. flat YTD).

Databank said Fireball is projected to become one of the five largest-selling brands this year. Other fast-growing brands include Crown Royal, New Amsterdam vodka, Tito’s, and Hennessy (primarily VS). Other brands marking milestones include Svedka, projected to become the market’s largest-selling imported vodka brand ahead of Absolut (number 1 since 1985), and Captain Morgan, which surpassed Bacardi as the largest rum brand in value terms.

Competitors with current full-service restaurants and bars that serve spirits are taking note in ways that are bound to fuel the growth but also change the perception of drinks served in fast casual restaurants. For example, the country’s first Taco Bell serving alcohol has opened in Chicago. The sleek, modern space is said to be a step up from the norm expected and features an open kitchen, shareable items and Twisted Freezes, icy drinks made with rum, vodka or tequila. The location also serves beer and wine.

So far the feedback has been mostly positive. The 3 spirits can be mixed and matched with 3 different frozen mixes: the Mountain Dew Baja Blast, the Cantina Margarita and the Twisted Cantina Punch. Ketel One Vodka, Don Julio Blanco and Captain Morgan White Rum are the spirit options, priced around $8. Whatever the price and quality, it's just another way Americans can enjoy spirits, and expect to do so.

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