Strong growth for distilled spirits in US over 2021
The distilled spirits sector in the US achieved strong growth in 2021, thanks to consumers trading up to super-premium spirits for at-home, and the gradual reopening of restaurants.
The findings came in the latest figures from the Distilled Spirits Council of the United States (DISCUS) at its annual economic briefing for media and analysts in early February.
DISCUS President and CEO Chris Swonger reported that supplier sales in the United States were up 12% in 2021 to a total of $35.8 billion, while volumes rose 9.3% to 291.1 million 9-litre cases.
In 2021, spirits gained market share of the total US beverage alcohol market with sales rising 1.7 share points to 41.3%. This represents the 12th straight year of market share gains for spirits overall.
“Last year, enthusiasm for spirits continued as consumers spent more to elevate their cocktail experiences with super-premium brands,” said Swonger. “Consumers savouring spirits at home and trading up to higher-end brands, combined with the gradual reopening of bars and restaurants, resulted in record sales for the spirits sector. We’re also seeing strong growth for spirits-based ready-to-drink products, and that’s adding to our sector’s gains as well.”
Swonger noted that the premiumisation trend, along with innovative COVID-relief measures such as cocktails-to-go, delivery and e-commerce, have helped to boost restaurants, bars and small distilleries as they continue to manage through the uncertainty and volatility created by the lingering pandemic.
Swonger underscored, however, that while the spirits sector has remained resilient during the pandemic, the uneven economic impacts of COVID-19 remain for certain segments of the U.S. hospitality industry.
Sales volumes at on-premise establishments, which represent about 20% of the US market, were up 53% in 2021 following nationwide restaurant and bar closures and restrictions. Off-premise sales volumes, which saw sharp gains in 2020, were flat in 2021.
Since the start of the pandemic, the National Restaurant Association reports that about 90,000 restaurants have temporarily or permanently closed, and the industry still hasn’t recovered more than 650,000 jobs.
During the briefing, Philip McDaniel, CEO and co-founder of St. Augustine Distillery and chair of the DISCUS Craft Advisory Council, also reported that many distilleries continue to face major challenges from supply chain disruptions, including difficulty securing glass bottles, closures and labels, as well as rising costs of materials and transportation.
On a positive note, McDaniel stated that the uptick in tourism across the country will help support the recovery of small distilleries, which rely heavily on tasting room sales.
“There are now more than 30 spirits trails across the United States,” said McDaniel. “This growth in spirits tourism not only benefits distilleries, it also helps transform surrounding communities, and boosts state and local economies.”
In presenting an overview of 2021 spirits sales trends, Christine LoCascio, DISCUS chief of public policy, reported that the premiumisation trend accelerated in 2021.
“Nearly 82% of the spirits sector’s total revenue increase was from the sale of high-end and super-premium spirits brands,” said LoCascio. “Purchasing luxury spirits to create craft cocktails was a simple pleasure for spirits consumers who hunkered down at home and curtailed spending on vacations and dining out for a second year in a row.”
LoCascio noted that tequila was a key driver of growth accounting for nearly one-third of the total increase in spirits revenue.
“From sipping fine tequilas, to enjoying classic cocktails like the margarita and paloma, consumers’ tastes for super premium tequila took off in 2021,” said LoCascio.
2021 Spirits Category Trends:
Top 5 spirits categories by revenue:
Vodka sales up 4.9% or $341 million to $7.3 billion
Tequila/Mezcal up 30.1% or $1.2 billion to $5.2 billion
American Whiskey up 6.7% or $288 million to $4.6 billion
Brandy & Cognac up 13.1% or $403 million to $3.5 billion
Cordials up 15.2% or $376 million to $2.9 billion
Top 5 fastest-growing spirits categories by revenue:
Premixed cocktails including spirits-based RTDs up 42.3% or $489 million to $1.6 billion
Tequila/Mezcal up 30.1% or $1.2 billion to $5.2 billion
Irish Whiskey up 16.3% or $185 million to $1.3 billion
Cordials up 15.2% or $376 million to $2.9 billion
Single Malt Scotch up 14.4% or $130 million to $1 billion.
