8 Trends that Defined the Distilled Spirits Industry in 2015

Sales of distilled spirits grew 2015, in line with sustained gains in recent years.

But an increase in one category can come at the cost of another.

These were among takeaways from the annual Distilled Spirits Council (DISCUS) media and analyst briefing, held earlier today at the New York Yacht Club. Here are six specific key points made by DISCUS officials during the briefing:

1. Spirits Achieved Sales Growth of 4.1% in 2015

And volumes were up 2.3%. These numbers mirrored industry gains in 2014 of 2.2% and 4%, respectively. Category growth has remained consistent.

The 2015 figures equal $72 billion in overall retail sales. Of this, $24.1 billion went to the spirits supplier side — a $950 million gain over 2014.

2. Spirits Continue To Beat Beer

For the sixth consecutive year, distilled spirits captured a slight increase in market share relative to beer. They had 35.4% of the total revenue market share and 33.5% of the volume in 2015.

Since 2000, distilled spirits have taken 6.7 points of market-share gains from beer. This equals $4.6 billion in total supplier sales.


3. Consumers Are Trading Up

In terms of price categories, High End ($20-$30 per spirits bottle) and Super Premium ($30+) grew the most in 2015.

High End increased 7.1% in volume last year, or $509 million in additional supplier revenue. This category represented 31% of gross U.S. supplier revenue (or $7.5 billion) and 20.5% of total U.S. spirits volume (or 41.1 million 9-liter cases).

Super Premium grew 6.5% in volume for $395 million in new supplier revenue. The category accounted for 20.6% of gross U.S. supplier revenue ($5 billion) from only 8.8% of total U.S. spirits volume (18.9 million cases).

4. American Whiskey Drives Growth

Brown spirits enjoyed another banner year in 2015. The category grew 7.8% in revenue for a $2.9 billion gain, and 5.2% in volume — or 20.4 million cases.

The growth was relatively even between traditional and flavored whiskeys, at 565,000 and 445,000 cases, respectively.

In terms of price categories, Super Premium whiskey expanded the most. It grew 26.5% in revenue to $411 million. This was followed by High End, which gained 6.8% in revenue to $1.7 billion.

Although rye whiskey has enjoyed a renaissance, the style still lags others considerably. Rye accounted for 671,000 cases in 2015, compared with 17.4 million for bourbon and Tennessee whiskey, and 2.2 million for white and corn whiskey.

Blended whiskey grew 9.7% in revenue to $633 million.

The annual Distilled Spirits Council (DISCUS) media and analyst briefing, held earlier today at the New York Yacht Club.

5. Foreign Whisky Expands Everywhere (Almost)

Irish whiskey continues to explode. Last year, the category was up 19.9% in revenue to $664 million. Volume has increased six-fold since 2005.

Canadian whisky revenue increased 8.1% in revenue to $1.8 billion.

Scotch had another strong year, with revenue up 13.5% to $732 million. Blended scotch, however, was down 1.3% in volume, and remained flat in revenue at $1.4 billion.

6. Tequila and Cognac Are On The Rise

Both spirits had much to celebrate in 2015.

Tequila grew 9.4% in revenue to $2.3 billion. Like other spirits, growth was consistent across all price points, though greater at High End (+17.2%) and Super Premium (+12.5%). Connoisseurs are embracing this spirit.

As they are enjoying cognac. This category expanded 16.2% in revenue to $1.3 billion. Super premium cognac gained 20.3% in volume.

7. Rum Loses, Vodka Goes Flat

“Not everything can grow,” aptly stated David Ozgo, DISCUS Senior VP of Economic and Strategic Analysis, during the briefing. Gains in some categories come at the expense of others.

Rum was the biggest loser of 2015. The category was down 1.5% in volume to 24.8 million cases. Revenue shrunk 2% to $2.3 billion.

However, super premium rum did rise 2.8% in volume.

Flavored vodka was down 1.1 million cases in volume, while traditional vodka went up 2.5%. The result: a revenue gain of only 0.5% to $5.8 billion. Total volume increased 1.8% to 68.2 million cases.

8. Legal Marijuana Does Not Necessarily Threaten Spirits

This tidbit came out during the Q&A portion of the briefing. Asked whether national efforts to legalize marijuana could financially hurt distilled spirits, Ozgo responded with cautious skepticism.

“I’ve seen the numbers, and in Colorado [where pot is legal], our sales are actually up,” he said.

So too was spirits revenue up in California, where medicinal marijuana is prevalent and easier to acquire than in other states.

Ozgo did say that DISCUS supports government regulations on marijuana, as with any product. He added that the industry would fight back against any attempts by the marijuana business to portray alcohol negatively.

Kyle Swartz is the associate editor of StateWays Magazine. Contact him at kswartz@epgmediallc.com


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