Spirits sales built momentum in 2010, says US Distilled Spirits Council

Spirits sales built momentum in 2010, says US Distilled Spirits Council

Spirits companies have continued to steal beer drinkers in the US over the last year, which has helped to cushion the effects of the country's weak economy.

It is too early to hail the resurgence of the US spirits market, as the US Distilled Spirits Council pointed out in its 2010 review yesterday (24 January). Qualifiers aside, though, several major players look to be in better shape heading into 2011.

A number of reasons for this can be gleaned from the DISCUS data. Higher-priced spirits categories have regained a little volume and value share of the sector from the lowest price category, so-called value spirits. However, it also seems clear that distillers - alongside wine producers - have eaten further into beer.

Overall spirits sales rose by 2.3% in 2010 to US$19.1bn, based on supplier gross sales, versus a volume increase of 2% over the same period.

During the year, spirits producers increased their total value share of the US alcohol market by 0.4% to 33.3%, marking a record high for the sector. Wine also increased its value share. But, beer's market share by value slipped by 0.7% to below the 50% mark for the first time in DISCUS' records, which date back to 1999.

DISCUS' data also shows that spirits' volume share of US alcohol sales increased by 0.7% in 2010. In contrast, beer sales by volume are expected to have declined by around 3% over the year.

Distillers' ability to woo beer drinkers, in other words, looks to have contributed to higher demand for spirits in 2010.

For distillers, this will be a welcome trend during a year that saw fewer price promotions during the key holiday periods. High-end and super premium spirits, stretching from Jack Daniel's and Maker's Mark to the likes of Grey Goose and Johnnie Walker Blue Label, made the biggest gains over the 12 months.

However, even though the DISCUS figures show that some consumers moved out of 'value spirits' and into pricier categories, the value segment did not shrink. Consumption of value spirits crept up by 0.4% to 76.2m nine-litre cases in 2010.

The industry challenge for 2011, then, is to sustain the momentum in the face of a sluggish economic recovery and attempts by the big brewers to reclaim lost ground.