The distilled spirits industry is still struggling to build momentum as it comes out of the recession, growing 1.6% in 2014, according to preliminary data from the Beverage Information & Insights Group (BIIG). The research groups recently released Handbook Advance shows that more than 213.4 million cases of distilled spirits were sold during calendar year 2014, compared to 210.1 million in 2013.
Beverage Dynamics Editor Jeremy Nedelka recently sat down with Adam Rogers to ask a few questions on certain industry trends.
JN: Should the industry be excited about 1.6% growth in 2014?
AR: No, the industry shouldn’t be excited about a 1.6% growth rate. The last time distilled spirits posted a 1.6% growth was in 2009 during the recession. But what is important to remember is that yes, today’s consumers are drinking less, but they are also drinking better which bodes well from a revenue perspective. What stands out the most in the beverage alcohol industry is that it appears to be going through a renaissance in regards to product quality. Never before have such high-quality products been available to consumers.
JN: How impressive is American Whiskey right now?
AR: Straight whiskey’s growth of 6.5% last year has led it to only be a year or two away from reaching its apex of 20 million 9-liter cases, which it posted two decades ago. 2014’s addition of 1.14 million 9-liter cases has brought the category only 1.2 million cases away from reaching that 20 million case mark. It is a cyclical trend, as consumers are more interested in what their grandparents drank rather than their parents. What is impressive right now are the current offerings from the suppliers. The high-quality, experimental products they are releasing are truly a work of art.
JN: Vodka’s growth has slowed and its market share is slipping…will we see the category decline in the coming years?
AR: I do believe Vodka’s share of market will continue to erode in the short term, but the category will stabilize in the long term. The current market is oversaturated and suppliers know that. For instance, of the new brands we tracked in 2014, there was a 42% decrease in new vodka products entering the market. With that being said, there will be some brands that continue to achieve success by providing the consumer with a feeling of product differentiation.
JN: What are the biggest sales trends you expect to see in 2015?
AR: Trends I expect to see include more small-batch and/or barrel-aged products across all categories from suppliers both large and small. Today’s consumer wants to feel special and purchasing a product that they feel is “crafted” for them achieves that. In their minds, they have something good that others may not have, and are looking forward to trying it and sharing their experiences on social media platforms. From the retail side, on-demand home delivery services will continue to make in-roads as convenience speaks volumes. Pun intended.
For more information about the Handbook Advance and additional beverage alcohol industry data from the Beverage Information & Insights Group, visit www.bevresearch.wpengine.com and www.bevinfostore.com.