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U.S. Spirits Market Reaches New Record High At 260 Million Cases

January 3, 2022

Amid a global pandemic, an uneven economic recovery, supply chain constraints, and other challenges, the U.S. spirits market continues to churn forward, with premium and above brands at the vanguard. Impact Databank estimates that total U.S. spirits volume reached a new record high of 260 million 9-liter cases in 2021 on a 2% increase.

Last year’s spirits market growth lagged the average annual rate of the past five years by about a percentage point, but some of that deceleration was likely due to the difficult comparison against 2020, which was boosted by a pandemic-driven retail surge and pantry-loading during the initial wave of the virus. By contrast, 2021 saw a broad—if incomplete—return to the on-premise, accompanied by a corresponding slowdown in retail sales.

Taking a look at the longer-term trend, the spirits market in the U.S. has expanded by more than 42 million cases since 2015, according to Impact Databank. Over that six-year period, the 25 largest spirits brands by volume have added nearly 28 million cases to their total in aggregate, while brands outside the top 25 combined for an increase of 14.7 million cases. Accordingly, the top 25 has increased its volume share of the spirits market to nearly 46%, up from about 42% in 2015.

Established trends like rising volumes for both Tequilas and whiskies held true to form over the past year, as did the competitive nature of the vodka category. Among the most significant developments recently has been the rise of premixed cocktails, which surged during the initial stages of the pandemic and have never slowed down since, with Impact Databank estimating that the category jumped 27% to 20 million cases in 2021. Indeed, among the fastest-rising brands last year was E.&J. Gallo’s High Noon Sun Sips vodka-based seltzer, which reached 5 million cases in just its third year on the market, up from 3 million cases a year earlier.

Perhaps the most encouraging trend from an industry perspective is the ongoing march of premiumization, with spirits labels in the premium and above range continuing to outpace the lower-priced end of the market. The $50 and up luxury tier is playing no small part in that progress, with the Distilled Spirits Council of the U.S. (DISCUS) reporting a 47% increase in luxury spirits sales in the third quarter of 2021.

“We’re seeing consumers making premium purchasing choices as they continue to enhance their at-home experiences,” Pernod Ricard USA chief commercial officer John Barrett recently told SND. “This is evident as we see growth in the $50-plus and $100-plus price tiers.”

Diageo CEO Ivan Menezes recently broke down the bright prospects for the U.S. spirits category over the next few years. “The typical U.S. household is spending $17 a month on spirits. Half the households buy spirits, so for those who buy spirits they are spending about $35 a month. That is a dollar a day,” he told analysts during Diageo’s Capital Markets Day in December.

“Now, when you look at the specialness of our brands and the ability to trade up, and just look at the top end of the U.S. market, say above $40, the ultra-premium end of that market, 50% of the top end is from people who earn less than $100,000 a year. 60% of it is multicultural, and that is going to grow,” Menezes continued. “Young people, 21-34, disproportionately buy ultra-premium products. In fact, twice the amount that they would buy of value and popular products. When you put this all together, we are very fortunate to be in a category which has resilience because of its affordability and the fact that it is a small part of the household budget.” —Daniel Marsteller

The Top Six Spirits Brands In The U.S. Market
(millions of 9-liter cases)
Rank Brand Company Origin/Type 2020 2021E Percent
Change1
1 Tito’s Fifth Generation Domestic Vodka 10.4 11.0 6.3%
2 Smirnoff2 Diageo Domestic Vodka 9.0 8.8 -2.9%
3 Crown Royal2 Diageo Canadian Whisky 7.3 7.3
4 Jack Daniel’s3 Brown-Forman Tennessee Whiskey 6.8 7.0 2.5%
5 Bacardi2 Bacardi USA Puerto Rican Rum 7.0 6.8 -2.7%
6 Fireball Sazerac Co Flavored Canadian Whisky 5.7 6.4 7.5%
Total Top Six 46.8 47.6 1.8%
1 based on unrounded data
2 includes flavors
3 includes flavored whiskies, single barrel and rye; excludes Gentleman Jack and Country Cocktails
4 addition of columns may not agree due to rounding
Source: IMPACT DATABANK © 2022
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