Overall, the news is positive for the beverage alcohol industry. In 2003, distilled spirits consumption rose in the U.S. for the sixth consecutive year, gaining almost 6 million 9-liter cases from 2002 to just over 159 million cases, an increase of 3.8%, according to the Adams Handbook Advance 2004. That gain more than doubled the 1.8% increase spirits consumption showed in 2002. For its part, wine consumption in the U.S. improved at an even faster pace, posting a 4.9% increase in 2003, to 257.5 million 9-liter cases. For the record, that was the tenth straight year that wine consumption grew in the U.S.
Almost every spirits category registered increases in 2003, with the non-whiskey segment (up 5.1%) outperforming total whiskies (up 0.5%). The largest spirits category, vodka, once again led the way with sales of more than 41.5 million 9-liter cases, a 5.3% gain over 2002 (Vodka itself now accounts for more than 26% of all spirits sales in the U.S.). Rum gained 5.1% to 19.5 million 9-liter cases, and tequila solidified its 2002 increase with another 6.4% gain to more than 7.6 million cases.
The best percentage showing among all non-whiskey spirits segments was cordials and liqueurs, which in 2003 became the second-largest category in the industry, posting a gain of 8.4% to more than 19.5 million cases. Brandy & cognac climbed 3.0% to almost 10 million cases, while prepared cocktails rose 4.0% to 6.1 million cases. Among the so-called white spirits only gin was down (-0.1%), a statistically insignificant decline that still saw the category registering more than 11 million cases.
Among whiskies, straights rose 1.6% in 2003 to more than 13.3 million cases, Canadians gained 0.3% to just under 15.4 million cases, while Irish whiskey jumped 13.7% to almost a half million cases. Scotch was off 0.4% to nearly 9.1 million cases, while American blended whiskies continued to decline, falling 1.2% to 5.4 million cases.
The wine segment has seen great results from the continuing publicity surrounding the health benefits of moderate consumption, as well as an increasingly wine-educated American public. Last year’s gains were again led by table wine, which now accounts for more than 90% of the U.S. wine market. Led by premium varietals, table wine grew by 5.5% to more than 232.4 million 9-liter cases in 2003. Imported wines showed a larger percentage gain (+10.6%) than domestically produced table wine (+4.0%), though domestic table wine now accounts for almost 69% of the entire U.S. wine market (imported table wine accounts for 21.3%).
Champagne & sparkling wine continued its modest rebound last year (+3.0%), to 12.2 million cases, while vermouth consumption, though small, gained 3.2% to more than 1.9 million cases. Dessert & fortified wine fell for the seventh straight year, off just 0.1%, while wine coolers once again fell dramatically, down another 35.5%, to 940,000 cases, still suffering from the influx of malternatives into the market.
Underlining recent industry strength are retail dollars from the sale of all beverage alcohol products: wine gained 6.2% in 2003 to $21.8 billion and distilled spirits increased about 7.9% to $45.5 billion. These are fairly healthy percentage gains and underline not only the volume increases across all segments but also continuing consumption trends favoring higher-end products.
There are four categories of Growth Brands and Fast Track represents the most demanding set of criteria. Among wines and spirits, these are brands whose sales exceeded 100,000 9-liter cases in 2003 while having also demonstrated double-digit growth over each of the past four years. (This means that even if a brand has grown 25% a year from 1999 through 2002, if it only grows 9% in 2003, then it does not qualify as a Fast Track brand, though it would likely be included in another category.) All Fast Track Brands must have at least a five-year history.
Other brands that have shown significant growth over the past few years, but have not yet been on the market for a full five years, have been designated as Rising Stars.
In addition, in order to highlight traditionally top-selling brands that have consistently grown over the past four years, we’ve created an Established Growth Brands category. Because many of these brands are already operating from huge sales bases, their percentage gains were often modest relative to their overall case volume, even though these brands have had substantial sales increases and are often leaders among their respective segments.
Finally, we have revised our Comeback Brands category this year. Instead of going back five years to identify a sales decline followed by a positive reversal, we’ve reduced that to three years, establishing 2001 as the baseline. A Comeback Brand, therefore, is a product that saw sales decline in 2002 (compared to 2001) and followed that with a sales gain in 2003. This increase, however, must have been at least equal to or greater than the 2002 sales decrease in order to qualify as a Comeback Brand.