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Issue link: https://read.dmtmag.com/i/57862
T hough we had an uneven economy overall in 2011, the wine and spirits industry apparently stabilized compared to the weakness of 2008 to 2009 and the modest growth of 2010. Indeed, the American economy itself appears to be headed in a sustained positive direction, as most economic indicators have shown in early 2012, and wine and spirits sales are likely to pick up along with the economy, particularly among higher-end products. (Of course, as all economists point out, any exogenous events–such as dangerous political crises or wars, huge natural disasters, etc.—could easily change all that). Still, overall wine and spirits sales volume increased nicely in 2011, according to the latest statistics, just released in the Handbook Advance 2012, published by the Beverage Information Group, Cheers' parent company. U.S. distilled spirits sales volume rose to approximately 197.1 million 9-liter cases, representing a 2.6 percent gain versus 2010 (which saw an increase of 1.9 percent sales volume over 2009). And overall spirits retail revenue growth (the combined dollar total of off - and on-premise sales) also increased, by three percent to $67.66 billion, a two billion dollar jump over 2010. It turns out that a large part of that increase is the result of more sales activity at the premium and above-premium price segments. In fact, the latest statistics from Th e Nielsen Company note that sales of "ultra-premium" spirits in the U.S. (at an average selling price of $35.92) rose 10.6 percent in 2011, and so-called "premium" spirits (at an average selling price of $17.64), gained 5.4 percent. Both these numbers show a signifi cant ongoing improvement over recent years, but in absolute numbers are still not at pre-Recessionary levels. Still, they refl ect an important psychological shift among consumers, particularly the more affl uent. Th e same holds true in the wine segment. Total U.S. wine consumption increased by 2.5 percent in 2011, to 310.7 million 9-liter cases (compared to an overall 1.7 percent wine volume increase in 2010), the eighteenth consecutive year of wine sales volume increases, according to Beverage Information Group research. Similar to spirits, the move toward high-end purchases continued in the wine segment. According to Nielsen, in 2011 www.cheersonline.com sales of table wine priced $20 and above increased by 11 percent; sales of wines priced $15 to $19.99 gained 7.8 percent; those priced $12 to $14.99 saw sales rise by seven percent; and sales of table wine priced at $9 to $11.99 gained 9.9 percent. Indeed, overall 2011 wine revenue fi gures show an increase of 2.9 percent to $27.69 billion, nearly $800 million more than in 2010. SPIRITS OVERVIEW For beverage alcohol professionals, vodka remains the engine that drives the business. Th e huge spirits category rose another six percent in 2011, following a 6.1 percent increase in 2010. Overall, the vodka segment added almost 3.5 million 9-liter cases to its total of approximately 65.85 million 9-liter cases. Indeed, vodka now represents almost a third of all spirits consumed in the U.S. New vodka expressions abound, with fl avors and brands from around the world still proliferating. Indeed, vodka fl avors are getting even more prolifi c and edgier. Still, the reasons for vodka's huge popularity remain primarily the easy mixability of the spirit and the continued popularity of cocktails made with vodka. Th e second-largest spirits category, rum, also saw consumption rise in 2011, up 1.3 percent to 25.88 million 9-liter cases. Still riding the popularity of the Mojito, the category activity continues to benefi t from new spiced and fl avored rums as well as a variety of new aged expressions. Tequila also increased last year, with consumption up a healthy 3.8 percent to just over 12 million 9-liter cases. Largely driven by the Margarita, the category's consumption trends also take into account the various levels—from premium to superpremium to ultra- premium—of a brand's portfolio. Straight American whiskey is another category that saw sales volume rise in 2011, gaining a respectable 3.7 percent to more than 15.85 million 9-liter cases. Th e segment has been energized by superpremium product introductions as well as successful fl avored Bourbon debuts. Th e smaller American blends segment decreased by 1.3 percent to just more than fi ve million cases. Other good news comes from the smallest imported whiskey category: Irish and Other whiskies. Th ey jumped ahead by 23.9 percent, but to relatively MARCH 2012 | 21