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/658171
36 Beverage Dynamics • March/April 2016 www.beveragedynamics.com SPIRITED GROWTH By Jeremy Nedelka The spirits industry is showing consistent growth, but the shake-up surrounding consumer preferences continues at the category level. Vodka (particularly fl avored vodka) is leveling off after more than a decade of expansion, while whiskey and tequila are vying to take its place long-term as the fastest-growing spirit. This year's list of Growth Brands winners includes 54 spirits in four categories: Fast Track Brands, Rising Stars, Established Growth Brands and Comeback Brands. Topping the list are tequila and liqueurs (which includes fl avored whiskeys) with 10 representatives each. Close behind are American Whiskey and vodka, with nine each. Industry-wide research from the Beverage Information & Insights Group (BIIG) shows how much current industry trends impacted the winners list. "American whiskey and imported whiskies were both up more than 4 percent in 2015, as was the tequila category," Velez says. "Those categories are well-represented in the list of winners. Consumers continue to be drawn to Bourbon, and that trend is expanding to other brown spirits." As the last of the Millennial generation reaches legal drinking age, 21- to 34-year-old consumers' preferences are having an increasing impact on beverage alcohol sales. "Younger consumers are embracing new expressions, particularly with fl avored whiskey," Velez adds. "The success of Fireball has led to the introduction of honey, cinnamon and other fl avors in brown spirits, which are doing well both on- and off-premise." We can expect the current trends to continue in the near- term, with gin and rum continuing to lose market share to brown spirits, and fl avors shifting from confectionary vodkas to sweet and spicy whiskeys. "I think fl avored whiskeys will continue to rise and fl avored 2016 GROWTH BRAND AWARDS SPIRIT WINNERS BY CATEGORY Spirit Category # of Winners % Share of Winners Tequila 10 19% Liqueur 10 19% American Whiskey 9 17% Vodka 9 17% Rum 7 13% Imported Whiskey 6 11% Cognac 2 4% Gin 1 2% TOP SUPPLIERS - SPIRITS Supplier # of Winners % Share of Winners Heaven Hill Brands 9 17% Diageo 5 9% Beam-Suntory 4 7% Brown-Forman Beverages 4 7% E & J Gallo Winery 4 7% William Grant & Sons 4 7% Pernod Ricard USA 3 6% vodkas will continue to fall," Velez says. "Tequila could be the next breakout category as whiskey drinkers continue to experiment. One thing we've learned about Millennials is that they're not brand- or category-loyal, so everyone is waiting to see where they turn next." What impact will these spirit category trends have on wine and beer? Velez says 2015 was a transitional year for beverage alcohol, as brands are learning to adapt to changing habits. 2016 GROWTH BRAND AWARDS SPIRITS "Highlighting the brands that contribute the most volume to our industry is very important," says Marina Velez, Senior Product Manager at the Beverage Information & Insights Group, which compiles the data used to determine the Growth Brands winners. "Although the winning brands accounted for roughly one-third of the industry last year, they contributed more than three-quarters of the growth. The Growth Brands are what propels the industry forward, so recognizing them is essential – they deserve to be honored." We spoke to many of the winners about how they grew sales in 2015 and what they're planning to ensure growth continues in 2016. Their tales of success can provide a template for struggling brands to turn things around, and hope for new brands fi ghting for attention. Beverage Dynamics congratulates all of this year's winners for their accomplishments. These 54 spirits and 78 wines will receive a well-deserved honor at the WSWA Convention in Las Vegas during our annual Growth Brands Award ceremony.