US: Spirits industry is recession resistant
02 February, 2009
US: The spirits industry is recession resistant, not recession proof. That’s the message from Distilled Spirits Council US (Discus) CEO Peter Cressy.
US: The spirits industry is recession resistant, not recession proof. That’s the message from Distilled Spirits Council US (Discus) CEO Peter Cressy.The Discus 2008 report showed slowing revenue growth of 2.8%, totalling $18.7 billion and volume growth of 1.6% to 184 million cases. He said: "Contrary to popular belief, the entire beverage alcohol sector is recession resistant not recession proof.” Resistance comes in the form of 8% growth in exports of US distilled spirits, primarily American whiskeys, totaling $1.1 billion for 2008. This represented a sixth straight year of record exports. Strong growth occurred in Australia (+24.3%); Canada (21.2%); France (15.9%); and Germany (8.9%). Emerging markets, including China and Brazil, where the industry had run market promotions, showed strong growth albeit from a smaller base. The report also highlighted the trend for premiumisation in the rum, American, Canadian and Irish whiskey, tequila and vodka sectors. Cressy said: "Bourbon and Tennessee Whiskey are unique and historic products of the United States that are capturing worldwide attention and acclaim. Importantly, export growth helps to protect jobs in the US, not only in the spirits sector, but in the farm, forest products, packaging and trucking sectors as well.” Cressy warned policy-makers not to give the industry a hard time in 2009. He said: "Our message is simple: we are not seeking a bailout; just do no harm.” Instead, he urged policymakers to continue the market access improvement trend highlighted in 2008 -- the 75th anniversary of Prohibition Repeal. He added: “Legislators now understand increasing market access for distilled spirits will drive new revenue for the states without raising taxes.” Cressy cited that in 2008 Colorado became the 13th state since 2002 to repeal its ban on Sunday spirits sales in package store bringing the total number of Sunday sales states to 35. Key factors Cressy cited in the industry’s recession resiliency included: holding the line on new hospitality taxes; expanding market access; continuing fascination with cocktail culture and consumer premiumisation; and spirits remain a good value compared with other beverages.