For mature beverage categories, producing year-over-year growth can be a challenge. For the U.S. wine and spirits markets, sales growth has allowed these categories to increase not only its own yearly comparisons, but also gain market share from other beverage alcohol categories.
“When you look at [spirits] performance against the other categories, it’s done really well,” said Boris Oglesby, executive vice president and practice leader for Beer, Wine and Spirits at Chicago-based Information Resources Inc. (IRI), in Beverage Industry’s April issue. “In terms of dollar sales, spirits grew in 2017.”
For the 52 weeks ending Feb. 11 in IRI measured U.S. multi-outlets, spirit dollar sales were up 2.9 percent, he noted.
Case sales for the U.S. spirits market also registered solid performance in the past year.
“The spirits market overall gained 2.2 percent on a volume basis in 2017,” said Eric Schmidt, director of alcohol research for New York-based Beverage Marketing Corporation (BMC), in Beverage Industry’s April issue. “On an overall basis, spirits share increased 0.2 percent points in 2017 and 0.6 percent on an overall serving’s basis.”
(Individual brands)
| Dollar Sales | % CHANGE VS. PRIOR YEAR | MARKET SHARE | % CHANGE VS. PRIOR YEAR | |
| Smirnoff Vodka | $315,463,037 | -1.1 | 4.5 | -0.2 |
| Jack Daniels American | $313,126,168 | 2.2 | 4.4 | 0.0 |
| Crown Royal Canadian | $277,986,752 | 3.7 | 3.9 | 0.0 |
| Tito's Vodka | $255,065,198 | 37.5 | 3.6 | 0.9 |
| Captain Morgan Rum | $4,223,901,023 | -1.1 | 3.2 | -0.1 |
| Fireball Canadian | $204,072,299 | 9.6 | 2.9 | 0.2 |
| Jim Beam American | $201,101,532 | 11.1 | 2.9 | 0.2 |
| Bacardi Rum | $181,149,115 | -3.6 | 2.6 | -0.2 |
| Jameson Irish | $139,000,794 | 13.3 | 2 | -0.2 |
| Absolut Vodka | $129,006,323 | -1.8 | 1.8 | -0.1 |
| Category total* | $7,047,745,837 | 3.2 | 100.0 | — |
Source: Information Resources Inc. (IRI), Chicago. Total U.S. supermarkets, drug stores, gas and convenience stores, mass merchandisers, military commissaries, and select club and dollar retail chains for the 52 weeks ending May 20.
Dollar sales also are expected to be on an upward trajectory. According to Chicago-based Mintel’s November 2017 report titled “Dark Spirits – US,” white and dark spirits are expected to increase 11 percent during the next five years, reaching nearly $68 billion.
The wine market also continues to post steady gains. Based on IRI data, the U.S. wine market grew 2.7 percent for a total of $11.5 billion in sales for the 52 weeks ending Dec. 24, 2017. Scott Scanlon, principal and team leader of the beer, wine and spirits vertical, noted premium wines' contribution to that performance.
“The premium-plus segment drove the growth of wine,” he said in Beverage Industry’s February issue. “It’s up 2.5 percent … and the numbers suggest that retailers are supporting premiumization by increasing distribution of the premium-plus SKUs. It’s really limiting the popular or value SKUs in the segment [because] more retailers are carrying the premium-plus products as the demand from the consumers grows.”
In its June 2017 report titled “Wine in the US,” Chicago-based Euromonitor International highlights that demographic trends are among the factors contributing to a growing premium wine market.
(Individual brands)
| Dollar Sales | % CHANGE VS. PRIOR YEAR | MARKET SHARE | % CHANGE VS. PRIOR YEAR | |
| Barefoot | $665,311,529 | -0.7 | 6.4 | -0.2 |
| Sutter Home | $379,819,641 | 2.7 | 3.6 | 0.0 |
| Woodbridge by Robert Mondavi | $349,223,729 | 3 | 3.4 | 0.0 |
| Franzia Box | $337,918,359 | -0.3 | 3.3 | -0.1 |
| Yellow Tail | $269,457,254 | -0.6 | 2.6 | -0.1 |
| Black Box | $221,124,664 | 22.6 | 2.1 | 0.3 |
| Kendall Jackson | $194,437,840 | 0.9 | 1.9 | 0.0 |
| Apothic | $193,295,075 | 4.4 | 1.9 | 0.0 |
| Menage á Trois | $182,460,477 | 2.3 | 1.8 | 0.0 |
| Chateau Ste. Michelle | $176,756,780 | -1 | 1.7 | -0.1 |
| Category total* | $10,367,017,086 | 2.9 | 100.0 | — |
Source: Information Resources Inc. (IRI), Chicago. Total U.S. supermarkets, drug stores, gas and convenience stores, mass merchandisers, military commissaries, and select club and dollar retail chains for the 52 weeks ending May 20.
“While millennials, and to a lesser degree, Generation X, are proving to be quite enthusiastic consumers of wine, their purchasing habits pose considerable differences for the wine industry to come to terms with,” the report states. “Chief among these differences is an inescapable demand for high-quality, authentic goods at an affordable price point. This frugality is reinforced by a technological savviness that allows younger consumers to have a strong awareness of price/quality dynamics. In practice, it has resulted in a willingness to buy premium wines in alternative pack types such as Tetra Paks and bag-in-box offerings, and this is at the expense of consuming wine through on-trade due to the high mark-ups involved.”
Premium products — as well as the growth of the American whiskey and bourbon markets — also have benefited the U.S. spirits market.
At its annual economic briefing, the Washington, D.C.-based Distilled Spirits Council praised contributions made from high-end and super-premium spirits. Across most spirit segments, the strongest growth were from these type of products, according to David Ozgo, the council’s chief economist. Revenues across high-end premium and super-premium were up 7.1 and 6.1 percent, respectively, while volume for the price points increased 7.3 and 4.9 percent, respectively.
IRI’s Oglesby also notes the impact that premiumization is having across the spirits market. “It’s basically revitalized spirits,” he says. “The category that you would look at within the spirits category would be whiskey, tequila and vodka.” BI
