DISCUS: Spirits Market Recalibrating After Pandemic Boom

After business boomed from 2019 to 2022, the U.S. spirits market faced headwinds in 2023, with the industry holding steady against changes in consumer behavior, according to data released by the Distilled Spirits Council of the United States (DISCUS). The annual economic report from DISCUS showed that the U.S. spirits market eked out 0.2% value growth to $37.7 billion. By volume, growth was stronger at 1.2% but still slow compared with the three previous years.

The broader picture is more positive, with DISCUS data showing that over the last two decades spirits revenues have grown by 5.1% annually. In addition, spirits have gained market share over the last decade, going from 32.5% of the alcohol market by volume in 2013 to 38.9% in 2023. By value, spirits market share capture was even stronger, going from 34.7% of beverage alcohol dollars in 2013 to 42.2% last year. For 2023, alcohol revenue from spirits represented the largest share of the industry, slightly overtaking beer.

“The spirits sector showed resilience in 2023, navigating through the choppy wake of the pandemic and maintaining our market share lead of the total beverage alcohol market,” said Chris Swonger, DISCUS president and CEO. “The phenomenal sales growth we saw during the pandemic was unprecedented and unpredictable but also unsustainable, and now, the spirits market is recalibrating.”

Tequilas and spirits-based RTDs continued to boom last year, as did premium and above American whiskies. In American whiskey, so-called high-end premium labels (like Jack Daniel’s and Bulleit per DISCUS’s definition) and super-premium brands (Knob Creek, Angel’s Envy) bucked declines in whiskey overall, with those higher price tiers adding 1 million cases in volume. Tequilas added 1.6 million cases for 2023, with the strongest growth coming from premium (such as El Jimador) and high-end premium (such as Espolòn, Teremana) priced brands. RTDs grew by over 12 million cases, buttressing volume but negatively impacting the price mix. The above-mentioned categories pushed the industry forward, despite declines in vodka, rum, gin, and non-American whiskies.—Shane English

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