The distilled spirits sector achieved accelerated growth in 2016 with supplier sales up 4.5% to $25.2 billion, volumes up 2.4% to 220 million cases and a seventh straight year of market share gains relative to beer.
“The continued growth of the spirits sector clearly demonstrates that adult consumers’ taste for and interest in premium distilled spirits, across all categories, is trending upward,” said Distilled Spirits Council President and CEO Kraig R. Naasz. “Spirits makers continue to develop new innovations to appeal to a growing audience of adult millennials, and they are responding by purchasing and enjoying our products.”
American whiskey – Bourbon, Tennessee and Rye – continued to attract US consumers with volumes up 6.8% to 21.8 million cases and revenues up 7.7% to $3.1 billion. Several other spirits categories performed exceptionally well in the US market including:
- Cognac volumes up 12.9% to 5.1 million cases; revenues up 15.3% to $1.5 billion
- Irish Whiskey volumes up 18.7% to 3.8 million cases; revenues up 19.8% to $795 million
- Tequila volumes up 7.1% to 15.9 million cases; revenues up 7.5% to $2.5 billion
- Vodka volumes, which represent one-third of all spirits volumes, up 2.4% to 69.8 million cases; revenues up 4.1% to $6 billion.
The Council estimated that overall retail sales of distilled spirits in the US market reached nearly $78 billion in 2016, supporting more than 1.4 million jobs in the hospitality and manufacturing sectors.
The spirits sector’s strong performance in 2016 resulted in market share gains relative to beer for the seventh straight year, as reported by Council Chief Economist David Ozgo. Spirits’ market share increased by one-half a point to 35.9%. Each point of market share is worth approximately $700 million in suppler revenue.
Ozgo cited key factors contributing to the spirits sector’s continued growth, including:
- The American Whiskey trend has plenty of room for growth as the country trends back toward historic levels of whiskey consumption
- Cocktails are exceptionally well-positioned to meet adult millennials’ demand for unique and varied experiences
- Spirits fit nicely into the trend of consumer interest in brands with authentic, interesting backstories
- Local distilleries are driving modernization of state and local laws and generating excitement in the overall spirits category
- Spirits have become a fixture in popular culture and are part of the norm.
Total US spirits export volumes increased 6.8% in 2016, driven largely by American whiskey – Bourbon, Tennessee and Rye – which increased 10.2% in 2016.