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DISCUS: U.S. Supplier Revenues, Volumes Jump In 2020

January 29, 2021

U.S. spirits supplier revenues surpassed $31 billion on volume up 5.5% to 251 million 9-liter cases in 2020, according to the Distilled Spirits Council of the U.S. With that strong performance, spirits’ share of total beverage alcohol supplier revenues climbed to 39.1%. Each percentage point is worth about $800 million, noted DISCUS chief economist David Ozgo, and last year about $1 billion of spirits suppliers’ revenue growth came from market share gains. Premiumization also drove progress last year, with 40% of revenue growth attributable to the super-premium segment.

American whiskey was a key contributor to that premiumization effect, with super-premium volume up 17%. Overall, supplier revenues from American whiskey advanced 8.2% to $4.3 billion on a 7% volume increase to 28.4 million cases. The situation is similar in Tequila and mezcal, which combined for 17% growth to $4 billion on volume up 10% to 22 million cases. Cognac, up 21% to $2.4 billion and 18.7% to 7.9 million cases, likewise continues to surge. Premixed cocktails have emerged as another growth driver, reaching $489 million on 39% revenue growth and jumping 35% to 8.4 million cases. Premixed cocktails account for only 2.6% of spirits industry volume, but represented 17% of growth last year. Moreover, premixed cocktails are not cannibalizing their parent brands, DISCUS reports, but are gaining drinkers from the beer, FMB, wine, and cider categories.

This year, DISCUS is focused on efforts to deescalate the trade tensions between the U.S. and E.U. that have resulted in tariffs on spirits on both sides of the Atlantic. The negative effect of tariffs is illustrated by the single malt Scotch whisky segment in the U.S., which was previously growing rapidly but last year slipped 2.1% to $905 million in supplier revenues.

Also of concern is the uneven growth across the industry last year, with tariffs and on-premise closures hitting craft distillers especially hard. Off-premise spirits sales grew 18% last year, while on-premise sales plummeted 44%. Off-premise growth has decelerated over the past few months, DISCUS added, as consumers have largely curtailed the pantry-loading buying patterns seen in the early days of the pandemic.—Daniel Marsteller

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