Premiumisation 'stalls' for spirits in US in 2023 - data

Twelve-month spirits sales inch up 0.2% to US$37.7bn
Volumes from full-year 2023 rise 1.2% to 308.8m nine-litre cases
Sales of ‘super-premium’ spirits down 4.3%, ‘value’ spirits climb 8.4%

In its annual economic briefing for 2023, released earlier this month, the Distilled Spirits Council of the US said that sales in the country last year were flat compared to 2022, while volumes increased by just over 1% overall. Of greater concern to brand owners will be the claim that sales at the super-premium end of the price ladder were down 4.3% as ‘value’ spirits registered an 8.4% lift in sales by value.

A subsequent presentation of the numbers noted that “overall premiumisation [has] stalled amid a reset”. DISCUS CEO Chris Swonger added: “The phenomenal sales growth we saw during the pandemic was unprecedented and unpredictable but also unsustainable. Now, the spirits market is recalibrating.”

The grounds cited for the disappointing performance included “high inflation and interest rates reducing consumer discretionary spending, consumers returning to more normal routines and buying habits post-pandemic, and retailers and wholesalers putting a pause on reordering as they reduced inventory build-ups”.

On a by-sector basis, the usual suspects of spirits-based RTDs and tequila & mezcal were the stand-out performers in the US last year. As in 2022, the pair led the way in growth terms for both value and volume sales.

Most startlingly, the Irish whiskey category cranked significantly into reverse: the previous year’s near-7% value increase turned into a 19.4% slump in 2023. Curiously, market leader Jameson, which is owned by Pernod Ricard and counts the US as its biggest market, delivered a dip in six-month sales to the end of December of only 1%.

American whiskey, meanwhile, registered a 3.8% value increase, down from 2022’s +10.5% performance.

The table of spirits sectors was propped up by cognac & brandy, a position held throughout 2023, according to monthly data released from the National Alcohol Beverage Control Association for the country’s Control States.

“Crises stall but don’t stop premiumisation,” DISCUS claimed in its presentation. “Premium-plus remained resilient in previous downturns and is expected to recover as long as macroeconomic factors remain positive in the US.”

There was better news in the long-running battle with the beer category for share of throat in the US. Having overtaken beer for the first time last year for alcohol market share, spirits accounted for 42.2% of all beverage alcohol sales by value, taking one tenth of a percent from beer, which was at 41.8%.

DISCUS defines its price descriptors as: