Discus review of US spirits industry

08 February, 2013

The Distilled Spirits Council (Discus), which represents the spirits industry in the US, revealed its 2012 findings in New York this week.

From 2011 to 2012 volume grew by 3%, revenue by 4.5% and there were record exports of US$1.5 billion.

Discus highlighted contributing factors to the growth as:

•         Growth driven by product innovations and sophisticated line extensions

•         Premiumisation trend continues to captivate consumers;

•         Modernisation drive expands consumer access and premiumisation opportunities;

•         Successful policymaker education avoids most tax increases;

•         Global fascination with American Whiskey drives third year of record exports;

•         Trade agreements with Colombia, Brazil, Korea, Panama and Russia add momentum;

•         Market share gains edge upward;

The organisation boasts that since 2002, 16 states have agreed to Sunday sales of liquor and 17 US states have allowed tastings to take place in liquor stores. Also, elections across the south and west have increasingly voted to “go wet” and allow spirits to be sold.

Discus says that from 2003 to 2012 sales of super premium spirits have “sky-rocketed” while the ‘value’ category has grown steadily.

The value category in terms of gross revenue has gone from $3,752m in 2003 to $4,078m while super premium has gone from a modest $1,474 to a staggering $3,902m.

Spirits’ revenue share of the total US liquor market has increased by 5.6 points from 2000 to 34.3% in 2012. By volume it is up 4.5 points to 31.9%.

The super premium category in 2012, by volume, represents 7.9%, with high end at 18%, premium 36%, and value 38.1%.

On flavoured spirits Discus says:

•         Cocktail/culinary trends drive experimentation – This drives product innovation and new flavours;

•         Flavoured products continue successful line extensions;

•         More than 40% of products have flavour component beyond traditional category – All categories (Vodka, Rum, Tequila, cordials, etc.);

•         220 flavours – from citrus to wasabi exist;

•         New successful flavoured expressions of iconic brands;

•         Discus said the industry’s strength long been based upon ability to offer product for every taste, budget and occasion.

The top flavours are:

Orange (163), Cherry (98), Coffee (87), Peach (85), Apple (84), Chocolate (82), Raspberry (82), Lemon (77), Anise (75), Lime (67), Coconut (59), Grape (57), Strawberry (54), Vanilla (50), Tea (47), Citrus (43), Blackberry (38), Mango (38), Peppermint (38) and Amaretto (34). 

Discus says 739 new products brought to the US market in 2012, 353 flavoured, 386 traditional. These accounted for 2.4m cases - 41% volume growth – 2.2 million flavored – 240,000 traditional.

Looking at the individual spirits categories: 

Vodka

Vodka accounts for 32% of all volume, 26% revenue – volume up 4.0% to 65m, revenue up 5.1% to $5.5bn

Price category growth:

– Value 1.7% to 26.6m, largest price/product segment

– Premium up 5.7% to 19.8m, revenue up 5.4% to $1.5bn

– High End up 3.5% to 12.5m, revenue up 4.0% to $1.6bn





Comment

Christian Davis

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