Spirits Gain Market Share vs. Beer; American Whiskey’s Surge Advances

High-end, pricier products are driving the gains, while “value” brands are losing share.
DISCUS Council President & CEO Kraig Naasz

Sales of distilled spirits continued to record gains in 2017, increasing in market share versus beer, the Distilled Spirits Council of the U.S. (DISCUS) reported at its annual economic briefing today. American whiskey and Tequila sales, in particular, drove 2017 sales.

“The spirits sector had a banner year in 2017,” said Council President & CEO Kraig R. Naasz. He credited consumer confidence in the economy for the surge in sales in the higher-end ‘premium’ segment of the category. Overall, growth along the higher-priced end of the spectrum was up while value categories lagged. Innovation such as new product lines and expressions such as special cask finishes and age ranges of dark spirits have also helped stimulate growth, Naasz said.

Supplier sales were up 4% in 2017, increasing $1 billion to a total of $26.2 billion, while volumes rose 2.6% to 226 million cases.

Spirits gained market share versus beer, with sales rising 0.7% to 36.6% of the total beverage alcohol market. It is the eighth straight year of market share gains, where each point of market share is worth $720 million in supplier sales revenue. Key drivers of growth included American whiskey, up 8.1% to $3.4 billion, and tequila, spiking 9.9% to $2.7 billion.

Categories to watch: rye whiskey, mezcal

Looking ahead, DISCUS also noted strong growth in sales of rye whiskey (up 16.2% by volume to 900,000 cases), echoing the boom in Bourbon and Tennessee whiskey, and mezcal, alongside the Tequila surge. This is the first time that DISCUS has broken out mezcal as a category, noting growth from less than 50,000 cases in 2009 to some 360,000 cases in 2017.

“Consumers’ demand for variety is driving growth,” said Council Chief Economist David Ozgo. “People are asking, what else is out there? What else is similar that I can enjoy?”

Among other categories, Cognac rose 13.8% to $1.6 billion, and Irish whiskey increased 12.8% to $897 million.

Vodka, the sector’s largest category and representing one-third of all volume, had another solid year with volumes up 2.2% and revenues up 3% to $6.2 billion, Ozgo said. But sales of flavored odkas fell in 2017 by 400,000 cases.

Higher-end spirits dominated across the board.  “Adult consumers, particularly millennials, continue to gravitate toward high-end and super-premium spirits products,” said Ozgo.

Record exports of spirits

On the international front, the trade association also projected a new export record of $1.63 billion of U.S. spirits sold around the globe in 2017, rising 14.3% over the prior year. Demand for American spirits—particularly whiskey—and a weak U.S. dollar drove global sales, especially to markets where U.S. spirits enjoy duty-free access. Volumes were up 5%.

The top five growth markets by dollar value included the United Kingdom, up $55.7 million to $177.9 million or 45.6%; Germany, up $22.6 million to $123.5 million or 22.4%; Brazil, up $18.9 million to $29.1 million or 186.5%; France, up $15.7 million to $114.1 million or 16%; and Spain, up $14.5 million to $117.1 million or 14.1%.

Published on February 1, 2018
Topics: Industry News
About the Author
Kara Newman 
Spirits Editor

Kara Newman reviews spirits and writes about spirits and cocktail trends for Wine Enthusiast. She's the author of several cocktail books, including Shake.Stir.Sip. and NIGHTCAP: More than 40 Cocktails to Close Out Any Evening, which debuts in September 2018. Email: spirits@wineenthusiast.net




Want breaking news in the wine world?

Sign up for the Beverage Industry Enthusiast newsletter for a weekly rundown on the latest
Sign up for the
Beverage Industry Enthusiast
newsletter for a weekly
rundawn on the latest
Please enter a valid email address

We will never share your email address privacy policy