Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
Issue link: http://read.dmtmag.com/i/282869
26 Beverage Dynamics • March/April 2014 www.beveragedynamics.com 2014 GROWTH BRANDS SPIRITS OVERVIEW The huge vodka category now comprises 34.1% of all spirits consumed in the U.S. But following years of annual growth rates hover- ing around 6%, the category gained only 2.5% in 2013, to an estimated 71.8 million 9-liter cases, adding nearly 1.4 million cases to its sales total. One explanation for the declining growth rate is simply the law of large num- bers: the category has become so dominant in the spirits landscape that even a large volume increase does not equal a large percentage increase. On the other hand, some observers believe that a bit of consumer fatigue with the wide array of fl avored vodkas is fi nally affect- ing the market. That may be true for some vodka brands, but for others, fl avors remain an essential element in their product mix. In- deed, last year, suppliers continued to intro- duce new vodka brands, line extensions and fl avors to the marketplace. At the same time, the superpremium vodka segment remains an important and vibrant part of the industry. Rum, the second-largest spirits category, also saw growth in 2013, though up a very modest 0.3% to an estimated 26.83 million 9-liter cases. A variety of popular rum-based cocktails contin- ues to aid category sales (the Mojito, etc). In ad- dition, the category is also benefi ting from new spiced and fl avored rum product introductions, as well as a growing niche of afi cionados drawn to higher-end rum offerings. Straight American whiskey had a stellar year in 2013, with sales volume rising 5.6% to 17.45 million 9-liter cases. The segment continues to be energized by growth in the superpremium segment, while also benefi ting from fl avored bourbon debuts. At the same time, the smaller American blends segment decreased by 1.5% to just over 4.86 mil- lion 9-liter cases. For its part, overall Scotch whisky built on 2012's modest gain (up 0.2%) to increase by 2.3%, one of the best showings for the category in recent years, totaling about 8.84 million 9-liter cases. Though several blended Scotch brands performed well, sin- gle malt Scotch sales saw an 11.7% across the board increase. Likewise, Canadian Whisky added to its modest sales increase in 2012, with a 1.2% gain 2013, to 15.65 million 9-liter cases. The segment's recent popularity can be partly traced to an increase in high-quality, high-end offerings, fl avored whiskies, and the consumer's newly discovered interest in rye. The smallest imported whiskey category, Irish and Other whiskies, jumped another 16.1% in 2013, to almost 2.5 million 9-liter cases, once again driven primarily by the ongoing success of Jameson Irish Whiskey. Tequila also increased last year, with con- sumption up a healthy 5.2% to 13.62 million 9-liter cases. Still largely driven by the Marga- rita, the category's consumption trends also take into account the various levels – from premium to superpremium to ultra-premium – of a brand's portfolio. The third-largest spir- its category, cordials & liqueurs, saw a signifi - cant consumption increase of 6.1% in 2013, to 22.33 million 9-liter cases. The fast growth of honey-fl avored whiskies most likely played a role in the gains. The brandy & cognac cat- egory also saw sales rise in 2013, by 2.4% to 10.75 million cases, with the largest increases, once again, seen among the high-end co- gnac segment. The gin category continued its slight decline from last year, down 1.2% in 2013; however, its increasingly visible high- end segment posted a 3.9% gain. For its part, Prepared Cocktails saw a decline, off 8.9%. WINE REVIEW Table wine comprises almost 92.0% of all wine consumed in the U.S., and it continued growing in 2013, rising 2.3% in 2013 to reach just under 299 million 9-liter cases. Domes- tic brands continued to outperform imports, gaining 2.5%, while imported table wines were up 1.3% overall. Domestic table wines now represent 70.8% of the overall U.S. wine market. Most industry observers point to the growth of premium- and superpremium- priced wines as an important dynamic in the marketplace, even though the majority of the overall sales volume is composed of wines selling for under $10 per bottle. Champagne & Sparkling wine posted a 2.7% increase in 2013, to almost 17.2 million 9-liter cases. Most of the growth in the cate- gory came from the more affordable domestic and imported sparklers. Even smaller in size is the Dessert & Fortifi ed wine category, which declined another 2.0% in 2013, to 8.14 million cases, while vermouth was off 1.4%. BRANDS MAINTAINING GROWTH So, what is the rationale for publishing our Growth Brands lists? To quote what we've said here before, "There are beverage alco- hol products in every category and at every price point that, for any number of reasons, have either lagged behind or outpaced their respective competitors. Often, a combination 2.4% 4.2% 2.2% 3.6% 210.6 million 9-liter cases $75.8 billion 326.0 million 9-liter cases $30.0 billion TOTAL U.S. DISTILLED SPIRITS SALES 2013 TOTAL U.S. DISTILLED SPIRITS RETAIL REVENUE 2013 (On- and Off-Premise Combined) TOTAL U.S. WINE SALES 2013 TOTAL U.S. WINE RETAIL REVENUE 2013 (On- and Off-Premise Combined)