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Impact Databank: U.S. Spirit’s Market’s Growth Slows To 2.1% Amid Covid-19 And Weaker Economy

September 15, 2020

After three straight years of accelerating gains, the spirits industry’s momentum has decelerated slightly this year, down to 2.1% growth, according to The U.S. Spirits Market: Shanken’s Impact Databank Review & Forecast, 2020 Edition, to a total of 241.5 million 9-liter cases estimated by year-end. The market will register its 25th consecutive annual volume advance in 2020, as stocking up due to the Covid-19 pandemic is projected to bolster the off-premise sector. Still, those off-premise gains won’t be enough to offset the on-premise losses during the crisis, and retail dollar value for the total industry is expected to decline slightly this year.

Looking ahead, the recession and lingering negative impact of the pandemic, as well as fierce competition from other drinks sectors—mainly hard seltzer—will cause the overall spirits market to keep slowing, according to the 293-page report. The spirits industry recorded a solid 2.7% annual growth rate from 2000 to 2010, and a further 2.3% average increase from 2010 to 2020, but will slow to 1.5% annual growth from 2020 to 2025. From a broader perspective, per-capita consumption has increased steadily since its decline during the global financial crisis a decade ago, and spirits will continue to siphon share from the beer and wine categories.

Tito’s vodka from Fifth Generation had been widely expected to surpass Diageo’s Smirnoff to become the largest-selling spirits brand in the U.S. at nearly 10 million cases in 2020, according to Impact Databank’s estimate. For the first time ever, Tito’s is also projected to lead the market in retail dollar terms, at nearly $2 billion this year, supplanting Hennessy Cognac. Including its flavored variants, Crown Royal continues to be the market’s top-selling imported brand by volume, followed by Fireball flavored Canadian whisky. And after shedding many lower-profit brands in recent years, Diageo continues to outpace all other spirits marketers by a wide margin, by both volume and value.

Among the major spirits categories, Tequila is the only high-volume segment expected to accelerate in 2020, as the pandemic and recession will cause other areas of the market to slow somewhat. With a continued influx of new products, flavored whiskies are also expected to outpace other spirits until at least 2025, along with some key lower-volume, high-profit segments, such as the super-premium sectors of Bourbon, single malt Scotch, gin, rum, and liqueurs.

For more information and to purchase the upcoming U.S. Spirits Market: Impact Databank Review & Forecast, 2020 Edition, as well as other exclusive Shanken reports and publications, visit impactdatabank.com.—Juan Banaag

Major Spirits Categories In The U.S.
(millions of 9-liter cases)
Type 2018 2019 2020E Percent Change
2018-20191
Percent Change
2019-2020E1
Vodka 77.72 78.28 78.50 0.7% 0.3%
American Whiskies 28.60 29.73 30.70 4.0% 3.4%
Scotch Whisky 7.65 7.60 7.50 -0.8% -1.5%
Irish Whiskey 4.27 4.63 5.00 8.5% 7.5%
Tequila 17.68 18.74 20.00 6.0% 6.5%
Cognac 6.10 6.50 6.90 6.5% 5.5%
Pre-Mixed Cocktails 6.70 7.83 8.90 17.0% 14.0%
Total Spirits 231.08 236.46 241.50 2.3% 2.1%
1 Based on unrounded data
Source: IMPACT DATABANK © 2020
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