“In this modern, experience-driven on-premise environment, premiumization is evident in all categories, however no category highlights this more than spirits,” Scott Elliott, SVP of Nielsen CGA, said.
“High-end” spirits now account for 55% of total spirits volume and 62% of dollar sales, a 3.2% increase from last year, bringing $807m to the channel, according to Nielsen.
Ultra-Premium Spirits are growing at the fastest pace (+5% in dollar sales). Premium and ultra-premium whisky and tequila alone have contributed 65% (or $631 million) of total spirits growth. In contrast, middle- and valued-priced spirits combined grew less than 1% in dollar sales, Elliott said.
A similar trend is occurring in off-premise consumption where sales of Irish whiskey, cognac, and tequila are registering the most growth by volume (11.4%, +12.7% and +7.3%, respectively). ). Ultra-Premium American whiskey and single malt Scotches are also making rapid gains unlike cordials and rum which continue to struggle.
On-premise dollar sales
Spirits: $42.6bn
Beer: $42.4bn
“As more consumers shop and buy in different ways and in different places, discretionary categories like adult beverages have to work even harder to be as easily accessible and prominent in the newer channels and retailers where shoppers are shifting to,” Danny Brager, SVP of beverage alcohol at Nielsen, said.
“With continued growth in spirits, the category has overtaken beer for the first time as the most valuable on-premise category,” Elliot added.
State of beer consumption
Volume sales of beer struggled the most in the overall alcohol category with on-premise consumption taking the biggest dip over the same one-year period (-2.1% in volume). Off-premise dollar sales of beer increased slightly for the past year (+0.8%).
In off-premise channels, domestic super premium increased 9.2%, Mexican Imports were up 9.1% and Belgium Imports grew by 13.8% over the last 52 weeks ending Oct. 7, 2017.
“From a brand performance perspective, some larger craft brands continue to struggle, but at the same time many others continue to grow at very strong levels, along with a very large number of smaller and very local craft beers,” Brager said.
“This unevenness is a sharp departure from the pervasive ‘all’s good’ story for craft beer in previous years.”
Rosé still on fire
Wine has had a solid year of growth in both on-premise and off-premise channels, Nielsen found. France, New Zealand and Italy are the leading import countries (by order of growth in percentage terms), while Oregon is a top performer in domestic wine, growing +18.4% in volume over the last year.
Wine is leading off-premise volume gains driven strongly by prosecco (+19.4%) and the continued popularity of rosé for at-home consumption. Elliott noted that rosé is also outperforming sales of white wine at bars and restaurants, where volumes and dollar sales of sparkling wine are up by 7.5% and 11.5%, respectively.
Red wine is also outperforming white in on-premise sales, but red blends have tumbled after several years of rapid growth in off-premise channels, according to Nielsen.