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Spirits’ Premium Tier Leads Off-Premise Value Upward

January 21, 2022

After gathering momentum in 2020 due to a pandemic-related 5.5% surge, the U.S. spirits market decelerated to 2% growth in volume terms last year, marking its 26th consecutive annual gain, according to Impact Databank. Looking ahead, the lingering negative impact of the pandemic—especially on-premise—and continued erratic economic conditions, as well as fierce competition from other drinks sectors, will cause the overall spirits market to keep slowing until at least 2025.

Spirits continue to battle tough comparisons against the 2020 surge, but while the overall market slowed down in 2021, higher-priced brands continue to do well. Among the 100 largest-selling spirits in IRI channels for the 52-week period ending December 26, just 12 brands registered double-digit growth, and only one of those dozen—New Amsterdam Pink Whitney—is priced below $20 a 750-ml. bottle. The fastest-growing spirits among the top 25 in IRI channels last year were both Tequila brands from Diageo—Casamigos and Don Julio—and both are priced above $45 a bottle, on average.

Total spirits dollars grew just 1.5% in Nielsen channels for the 52-week period ending January 1—which includes the all-important holiday-selling period—and the category fell 0.6% in volume terms. However, premium-priced brands (averaging $18.34 a 750-ml. bottle) grew a solid 5.4% by volume and 2% in dollar terms, while ultra-premium-priced spirits (averaging $69.82), surged 19.3% and 23.5% by volume and value, respectively.

The fastest-growing categories in IRI channels last year were pre-mixed cocktails—primarily due to the 183% growth of spirits-based seltzers—Tequila (+9.4% by value), and on a smaller scale, 22% growth by imported world whiskies, a category that excludes major producers like Canada, the U.K., and Ireland.—Juan Banaag

Distilled Spirits in Nielsen Channels by Price Segment
(52 weeks ending January 1, 2022)
Segment Average Price
(per 750-ml.)
Dollars
(Billions)
Percent
Change
9-Liter Cases
(millions)
Percent
Change1
Value $6.69 $1.52 -9.7% 18.91 -10.9%
Mid-Priced $10.46 $5.10 -5.8% 40.65 -2.5%
Premium $18.34 $8.21 2.0% 37.30 5.4%
Ultra $69.82 $2.07 23.5% 2.47 19.3%
Total $15.96 $16.90 1.5% 99.33 -0.6%
1 Compared to 52 weeks ending January 2, 2021Source: NielsenIQ and IMPACT DATABANK © 2022
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