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Premiumization Drives Gains For Retailers, As Demand Exceeds Supply Of Key Labels

January 22, 2021

An intense focus on high-end spirits ignited by the onset of Covid-19 last March rocketed throughout the holiday season, key retailers report. Tequila led the charge with supply struggling to keep pace with lightning-quick demand. “Interest in super-premium spirits is category driven right now,” says Jeff Zacharia, president of Zachys Wine & Liquor in Scarsdale, New York. “Tequila sales more than doubled in 2020, especially in the super-premium category.”

Sales could have been greater for certain brands if supply wasn’t an issue. “Clase Azul Reposado ($150 a 750-ml.) and Don Julio 1942 ($166 750-ml.) have led the way with demand, but both have had supply issues,” Zacharia says. “Cincoro Reposado ($120 a 750-ml.) has also been a highlight, and has thankfully had good supply.”

At Downtown Spirits in Seattle, Tequila sales have been explosive, but senior purchasing manager Terrence Tompkins says the store also saw supply issues hurt growth. “Supply issues only intensified over the holidays with high-end Tequila and especially with Scotch,” he says, noting that the store’s bestselling Tequilas include Espolòn Reposado ($35 a 750-ml.) and Blanco ($32), Casamigos Blanco ($70 a 1-liter), and Patrón Silver ($68). “Casamigos would have higher sales if it was regularly in stock,” Tompkins adds. “Agave spirits overall, especially extra añejo Tequilas and high-end mezcals, like Bozal, are more popular than I have ever seen them.”

Among upscale vodkas, Grey Goose ($40 a 1-liter) was Zachys’ 2020 growth leader. “Vodka as a whole was incredibly strong in 2020 but has seen very little change among the top-selling items, and super-premium hasn’t changed much at all,” Zacharia says.

At Downtown Spirits, Belvedere ($30 a 1-liter) and Ketel One ($29 a 750-ml.) were the top selling super-premium vodkas in 2020. “Year-over-year sales are outstanding,” Tompkins says. “When it comes to Bourbon, rye, and Scotch, the popular products are pretty similar to 2019.” Market Watch has more. —Kevin Barry

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