|
Distilled Spirits Council Annual Economic Briefing:
The Distilled Spirits Council (DISCUS) reported today that U.S. spirits maintained its market share while revenues slipped in 2024 and warned that tariffs on spirits would further curtail industry growth, during its annual economic briefing for media and analysts. “While the spirits industry has proven to be resilient during tough times, it is certainly not immune to disruptive economic forces and marketplace challenges, and that was definitely the case in 2024,” said DISCUS President and CEO Chris Swonger. Swonger reported that spirits supplier sales in the United States were down -1.1% in 2024 totaling $37.2 billion, while volumes rose 1.1% to 312.2 million 9-liter cases. For the third year in a row, the spirits sector maintained its market share lead in 2024. Spirits market share totaled 42.2%, with gains for more than two decades. The spirits sector has gained more than 13 points of market share since 2000. Each point represents $880 million in supplier revenue. Swonger noted that spirit sales were still continuing to normalize following the robust sales spikes during the pandemic, and economic headwinds including high prices and inflation rates created additional challenges for the industry. “Consumers were contending with some of the highest prices and interest rates in decades, which put a strain on their wallets and forced many to reduce spending on little luxuries like distilled spirits,” said Swonger. “Our sales dipped slightly but consumers continued to choose spirits and enjoy a cocktail with family and friends.” Swonger noted that higher interest rates also impacted the three-tier supply chain with wholesalers and retailers continuing to deplete inventory build ups and cautiously restock products. CONSUMER DEMAND REMAINS STRONG FOR SPIRITS RTDs AND HIGH-END TEQUILA/MEZCAL Presenting an overview of the spirits sales trends in 2024, Christine LoCascio, DISCUS chief, policy, strategy & membership, reported that despite the overall slowdown, spirits ready-to-drink (RTD) products and Tequila/Mezcal continued to grow in popularity in 2024, with sales up 16.5% and 2.9%, respectively. TOP 5 SPIRITS CATEGORIES BY REVENUE IN 2024:
In the public policy arena, Swonger highlighted a number of important victories in 2024 at the federal and state levels including:
During the briefing, DISCUS discussed the recent tariff threats impacting spirits imports and exports, and sounded the alarm over the scheduled reimposition and doubling of the EU’s tariff on American Whiskey to 50% on April 1 related to the steel and aluminum trade dispute. “One of the most critical issues facing U.S. distillers in 2025 is the threat of tariffs,” said Swonger. “Since the suspension of the EU’s tariffs on American Whiskey, our exports have rebounded to record highs. The reimposition of these tariffs at a 50% rate would gut this growth and do irreparable harm to distillers large and small. It would be a catastrophic blow that will force many distillers out of our largest export market.” Special guest speaker, Sonat Birnecker Hart, president and founder of KOVAL Distillery in Chicago, underscored the devastating impact tariffs have had on small craft distillers. “These tariffs have wreaked havoc on our craft distilling community,” said Birnecker Hart. “Many craft distillers have expended great time, effort and resources to expand into international markets only to see their dreams shattered by tariffs that have absolutely nothing to do with our industry. The return of tariffs will not only hurt my distillery but my local farmer too, and this pain will be felt in towns and cities across the country where 3,000 small craft distilleries are boosting jobs, tourism and agriculture.” Swonger said the global spirits industry is united in urging their respective governments to continue to negotiate to ensure that spirits products do not get caught up in trade disputes. “The global spirits associations are working side-by-side to urge our governments to exclude distilled spirits from these trade disputes,” said Swonger. “Tariffs on spirits not only harm distillers, they also severely impact farmers and hospitality businesses including restaurants and bars, which are continuing their fragile recovery after the pandemic. We are making our case to the Trump administration that our industry has thrived with zero-for-zero tariffs and that distilled spirits’ ‘distinctive products’ status, which is recognized by the U.S. and our trading partners, means that these special spirits can only be made in their designated countries.” ### SUPPORTING MATERIALS: DISCUS Annual Economic Briefing Presentation – 2024 Economic Briefing Support Tables – 2024 10/27/2022 Beer is on pace to lose its leading share of the U.S. alcohol market as spirits surgeRead Now Source: https://www.cnbc.com/
October 27, 2022 KEY POINTS Beer sales are up, but it hasn't been enough to counter the explosive rise of the spirits category. Beer has been losing market share to spirits for the last 12 years in the U.S., according to a trade group. Spirits dominate the share on liquor delivery app Drizly, the company said. Beer is taking up less of the American booze market as beverage companies flood the market with buzzy new drink categories, including ready-to-drink cocktails. Even legacy beer companies have expanded outside of their staple beer products with innovations for spirits drinkers. Anheuser-Busch InBev, the world's largest brewer, has diversified its portfolio to include hard seltzers, canned wine and canned cocktails. Molson Coors dropped the "Brewing Co" from its name in 2019 to reflect a similar expansion into spirits. This week, Samuel Adams maker Boston Beer debuted Loma Vista Tequila Soda, a ready-to-drink tequila cocktail in both lime and mango flavors. The lineup is launching in a handful of markets, including Austin, Texas; Fort Collins, Colorado; Wichita, Kansas; and Kansas City. Boston Beer said its tequila cocktails sit at the crux of "the explosive growth of the RTD beverage segment" and "the rise in popularity of tequila." DISCUS said the top five spirits by revenue growth in 2021 were vodka (4.9%), tequila/mezcal (30.1%), American whiskey (6.7%), Brandy & Cognac (13.1%) and cordials (15.2%). Last year was the 12th consecutive year spirits have taken away market share from beer in the total U.S. alcoholic beverage market, according to a report earlier this year from the Distilled Spirits Council, a national trade organization. The beer category, which includes hard seltzer, accounted for 42% of the U.S. beverage alcohol market in 2021, while spirits accounted for 41%, according to DISCUS. Wine accounted for 16%. At this trajectory, spirits are pegged to overtake beer in market share in the next few years, even though beer sales have grown. "Spirits consumers are willing to spend a little extra for a fine spirit because they are choosing to drink better, not more," DISCUS' top spokeswoman, Lisa Hawkins, told CNBC this week. The downward trend of beer market share has also been reflected on the online ordering and alcohol delivery platform Drizly. Over the past 12 months, beer has accounted for a 14% share, a two percentage point drop from the previous 12 months, according to Liz Paquette, head of consumer insights at Drizly. Spirits accounted for a 45% share, increasing by one percentage point. "The beer share decline in recent years on Drizly is mostly a result of share shift toward the spirit category, driven by the surge in categories, like tequila and ready-to-drink cocktails," said Paquette. Paquette added that beer actually accounts for 11% when hard seltzers aren't included. However, while beer is shrinking in market size, sales are actually up. Wall Street, in turn, likes liquor companies such as Constellation that make premium, higher-priced beer. "There's pockets of growth," said Bart Watson, chief economist for the Brewers Association. He said beer drinkers are seeking out more premium offerings as well. In 2021, overall beer sales were up 1% year over year - hitting $100.2 billion - and sales of craft beer jumped 8%, according to the association. Craft beer, said Watson, may be the industry's answer to consumers' increased willingness to spend more on variety, flavor and quality. Craft beer is typically made with higher quality ingredients, which provides consumers with a more flavorful and distinctive tasting beer than mass-produced options. "Those reaching for craft often want a variety of flavors and to try new things," said Watson, adding that craft brews "really helped beer not lose more market share over the last decade." The association said the number of operating craft breweries in the U.S. reached an all-time high in 2021 of 9,118. Paquette of Drizy said there are trend changes happening within the beer category - subcategories like light lagers, which contain a low alcohol volumes, and even non-alcoholic beer are showing growth across Drizly, as well. Still, it looks like cocktail culture is primed to be dominant in the United States. "Consumers are drawn to products that have a rich heritage and an interesting back story, and that's what spirits have to offer," said Hawkins of DISCUS. |
Details
Archives
March 2025
Categories
All
|