In 2021, Drinkers Shelled Out As Premium Spirits Sales Soared

Food & Drink

As premiumization continues to trend in the spirits sector, sales of luxury spirits are soaring. New data from Distilled Spirits Council of the US (DISCUS) showed that sales of luxury spirits grew 43% in the last year, led largely by tequila and American whiskey. Last year’s growth rate was more than double the average rate (18%) of the last five years.

Sales of high-end spirits increased by 47% in the third quarter of 2021, compared to the third quarter of the year prior.

“The spirits premiumization trend of recent years accelerated to a new level in 2021,” said Christine LoCascio, DISCUS chief of public policy. “Faced with restaurant and travel restrictions brought on by the pandemic, consumers increased their purchases of luxury spirits to elevate their cocktail experiences at home.”

Not only has the volume of luxury spirits sold in the United States skyrocketed over the last six years, but almost every category of luxury spirits have also seen jumps in annual growth. Across tequila, Japanese whisky, rum, and bourbon, growth rates range from 6% to 48%, with an average rate of 23%.

This data was provided by the Luxury Brand Index, a new tool by the Distilled Spirits Council to analyze the sales of luxury spirits brands. The report narrows in brands in the US space that have a 750ml retail price of $50 or more. New data analyzing the segment will be released every quarter.

What’s the draw of pricey spirits? Certainly, there’s the higher quality and prestige in name and packaging. But with drinkers stuck at home over the pandemic, opportunities to spend in bars curtailed and consumers put their savings towards higher-price bottles. Without the guidance of a bartender, drinkers started souping up their own home bars — single malt Scotch, sipping tequilas, and better bourbons.

Last year, IWSR research director Jose Luis Hermoso noted in a release that “Covid restrictions have led consumers to appreciate the value of at-home treating through the purchase of premium products. The pandemic has put a lot of things into perspective, and ‘carpe diem’ is back on the agenda.”

Digging into specifics on last year’s luxury jump, tequila showed the biggest gains over the period, reporting a 75% annual growth rate. 2020 was also a banner year in tequila growth – the category showed a 46% growth over the year.

In the realm of brown spirits, luxury American whiskey reported 46% and luxury Cognac gained 31%. Scotch whiskey rebounded from tariffs at a 20% growth rate, bouncing back after reporting losses in 2020. Irish whiskey rose 9%, while Japanese whisky showed no growth.

The growth of Scotch comes despite the hurdles posed by tariffs. The imposition of a 25% retaliatory tariff on American whiskeys caused by the steel-aluminum dispute dropped exports to the UK by 42% over a four-year period, from $150 million to $88 million. To cover the loss, American whiskey brands had to turn their eye to their home market.

The suspension of the tariffs ended in October 2021.

Zooming out and looking at five-year trends, American whiskey and tequila grew more than 40% per year, while Cognac showed 19%. Japanese and Scottish whisky grew just 6% annually over the last five years — credit the US tariffs on single malt for that sluggishness.

Products You May Like

Articles You May Like

American Airlines to stop flying to four small cities, citing pilot shortage
The world’s most liveable cities for 2022
You’ll be charged to visit Europe from 2023
30 amazing family holidays that you can still book for this summer
The airplane seat with headphones installed into the headrest

Leave a Reply

Your email address will not be published.