Research from the IWSR has revealed that premium spending is leading all alcohol categories in America, as agave spirit and moderation trends also drive growth.

Beer, wine, cider, spirits and RTDs all posted growth in the premium-plus price tiers, even as some categories experienced total volume declines.

Wine and beer were both down by two per cent, while cider volumes declined by four per cent. Meanwhile, the premium-and-above segments grew for all three categories, with wine expanding by six per cent, beer by four per cent, and cider by 11 per cent.  

Premium RTDs experienced considerable growth of +38 per cent, contextualised with a total volume growth for the wider RTD category of less than a per cent. Total spirit volumes increased by two per cent, with premium plus expanding by +13 per cent.

“Economic uncertainty continued throughout 2022, ranging from inflation to talks of a recession to supply chain instability,” says Brandy Rand, Chief Strategy Officer, IWSR Drinks Market Analysis.

“Despite this, a recent IWSR consumer price sensitivity survey shows Americans feel confident about their finances at a personal level.”

Unsurprisingly, high-income earners (earning over USD$150,000) were especially assured, while in all demographics, Millennials showed more confidence than older consumers.

‘Consumer data shows consumer spending and purchasing volume are up in 2022 vs 2021 in most tracked categories,’ the IWSR report read.

“Another area where premiumisation is proving to be a key factor driving volume is at-home consumption,” says Rand.

“With a vast majority of Americans consuming alcohol at home, 46 per cent say they are likely to treat themselves to better quality drinks there, which is also beneficial for wine and beer.”

Spirits are enjoying the greatest benefit from premiumisation, with the IWSR finding that a third of Americans said they had spent USD$50 or more in 2022, compared to 24 per cent in 2021. Sixty per cent of American shoppers said they spent more online than in-store too.

Spirits continue remarkable run

According to the IWSR, the spirits category has recorded its 25th straight year of volume gains in US, with some interesting figures at the sub-category level.

Total whisky volumes increased by three per cent, and surpassed vodka (which had growth of less than one per cent) for the first time in nearly 20 years.

The agave spirits category continues to perform very strongly, accounting for 70 per cent of overall spirits volume growth, and 65 per cent of value growth. In particular, tequila passed American whiskey to become the second most value subcategory in America, and is predicted to overtake vodka by 2023.

NOLO continues to gain momentum

No and low alcohol products recorded a growth rate of 15 per cent in 2022, albeit from a low base (only one per cent of total beverage alcohol). And the IWSR is tipping this to continue, as their research found that over 50 per cent of drinkers wanted to moderate their intake in 2022.

COVID effects beginning to stabilise

It’s no secret that the off-premise and e-commerce benefitted greatly from the closure of bars, pubs, restaurants and clubs, but the IWSR has suggested that the impacted of the pandemic is being washed out of the figures.

‘Near-term corrections will see the picture stabilize over the next five years,’ the report read.

‘E-commerce share was up one per cent in 2022, at a much more moderate performance than pandemic highs.’

And in happy reading for on-premise operators, the organisation is predicting a full recovery for the industry this year.

‘On-premise recovery is evident with the channel up 24 per cent, and with a full return to pre-pandemic volumes expected in 2023.’

Read the full report here.

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