While the U.S. economy appears to be in a modest recovery mode, the wine and spirits industry continues to pick up steam. Overall wine and spirits sales volume saw healthy growth in 2012, according to the latest statistics, just released in the Handbook Advance 2013, published by the Beverage Information Group.
Total U.S. distilled spirits sales volume rose to almost 206 million 9-liter cases, representing a 3.6% gain vs. 2011 (which saw an increase of 2.6% sales volume over 2010).
And overall spirits retail revenue growth (the combined dollar total of off- and on-premise sales) also increased, by a hefty 5.4% to $72.12 billion, a nearly $3.7 billion jump over 2011. Underlining the trends of the past few years, a significant part of that increase is the result of more sales activity at the premium and above-premium price segments.
In fact, the latest statistics from The Distilled Spirits Council of the U.S. (DISCUS) point out a notable trend toward upscale purchases: From 2003 to 2012, supplier sales of value products rose 24.5%, while using the same metric, supplier sales of superpremium spirits products gained 163.0%. This movement is clearly indicated by the higher percentage revenue gains vs. sales volume gains, as impressive as they may be.
The same holds true in the wine segment. Total U.S. wine sales volume increased by 2.7% in 2012, to approximately 320.8 million 9-liter cases (compared to an overall 2.5% wine volume increase in 2011). That’s the 19th consecutive year of wine sales volume increases, according to Beverage Information Group research. Similar to spirits, the move toward high-end purchases continued in the wine segment, evidenced by the segment’s 3.9% revenue increase in 2012 to $28.9 billion.
The vodka category continues to dominate the spirits landscape in the U.S. The huge segment rose another 6.0% in 2012, following a 6.0% increase in 2011. Overall, the vodka segment added almost 4 million 9-liter cases to its 2012 total of about 70.43 million 9-liter cases.
Vodka now represents just about one-third of all spirits consumed in the U.S., with new expressions, flavors and brands from around the world continually testing the U.S. marketplace. Even with the deluge of unusual flavor introductions, vodka also maintains a vibrant superpremium segment, which according to DISCUS rose by another 10% in 2012.
Rum, the second-largest spirits category, also saw growth in 2012, up 2.1% to 26.87 million 9-liter cases (compared to a 1.3% gain in 2011). The continuing popularity of the Mojito is still helping to drive rum sales, along with other fashionable rum-based cocktails. What’s more, the category is benefiting from newer spiced and flavored rum launches, as well a higher-end offerings.
Straight American whiskey is another category that saw sales volume rise significantly in 2012, gaining 4.9% to 16.5 million 9-liter cases. The segment has been energized by growth in the superpremium segment (up 12.4%, according to DISCUS), while at the same time benefiting from flavored bourbon debuts. Once again, the smaller American blends segment decreased by 1.1% to just over 4.93 million cases.
For its part, overall Scotch whisky reversed declining sales volume from 2011 (down 1.4%) to eke out a slight 0.2% gain in 2012, to 8.57 million cases. A notable segment is single malt Scotch, which gained more than 9% in 2012. Canadian whisky also reversed a downward trend, with a 0.5% sales increase to 15.4 million cases.
Good news continues to come from the smallest imported whiskey category: Irish and other whiskies. They jumped ahead by 17.8% in 2011, to a relatively modest total of 2.08 million 9-liter cases, once again driven primarily by the ongoing success of Jameson Irish Whiskey.
Tequila also increased last year, with consumption up a notable 5.7% to just under 13 million 9-liter cases. Still largely driven by the Margarita, the category’s consumption trends also take into account the various levels—from premium to superpremium to ultra-premium—of a brand’s portfolio.
The third-largest spirits category, cordials & liqueurs, saw total consumption gain 4.6% in 2012, turning around a slight decline in 2011. Also gaining was the brandy & cognac category, which was essentially flat in 2011 but saw sales rise by 1.6% in 2012, with the largest increases attributable to the high-end cognac segment (up 5.2%).
The gin category continued its slight decline from last year, down 0.8% in 2012, while prepared cocktails likewise saw a modest decline, off 2.5%.
Table wine now comprises about 92.0% of all wine consumed in the U.S., and it continued growing in 2012, rising 2.8% in 2012 to reach 295.1 million 9-liter cases. Once again, domestic brands outperformed imports, gaining 4.3%, while imported table wines declined 2.1% overall.
Domestic table wines now represent 71.7% of the overall U.S. wine market. While a majority of the sales volume is comprised of wines selling for less than $10 per bottle, the greatest percentage growth is in the higher-end price segments. And industry observers say that as the economy continues to recover, premium and superpremium wine sales should pick up.
Champagne & sparkling wine kept pace with 2011’s gains, up by 3.6% in 2012, to more than 15.8 million 9-liter cases. This is the 11th straight year of gains for this segment, and it’s approaching the highpoint of sparkling sales of more than 17 million cases regularly seen in the 1980s. The recent popularity of prosecco is playing a significant role in this growth. Even smaller in size is the dessert & fortified wine category, which declined another 0.7% in 2012, while vermouth dropped 4.9%.
Brands Maintaining Growth
So, what is the rationale for publishing our Growth Brands lists? To quote what we’ve said here before, “There are beverage alcohol products in every category and at every price point that, for any number of reasons, have either lagged behind or outpaced their respective competitors. Often, a combination of elements—among them solid distribution and retail support, supplier resources, marketing creativity, product heritage and brand equity, the right economic environment, a solid product in the bottle, advantageous price positioning and sometimes just plain luck—help lead to product success.”
While the great Recession of late-2007 through mid-2009 weakened many high-image, high-priced brands, many of them have recovered their sales momentum as well as their caché.
On the other hand, newer brands have thrived, and many others that adjusted to new market realities and maintained some growth, as well as a variety of additional brands that continue to make positive strides with consumers and retailers alike. Those are the brands that appear on the following pages.
And, as we’ve said in the past, though evaluating category consumption trends can provide the big picture, drilling down to actual brand performance provides the details. Thus, the reason for our annual Growth Brands report, which uses the most up-to-date industry results to highlight the wine and spirits brands with noteworthy growth over the past several years. (The September 2013 issue of Cheers will publish Beer Growth Brand results.)
Spirits: Fast Track Brands
The Fast Track Growth Brands category includes the top-performing brands, percentage-wise, during the past four years. The criteria are demanding: A wine or spirit must have maintained double-digit percentage growth over each of those four years while selling at least 100,000 9-liter cases this past year.
Based on the Beverage Information Group’s 2012 statistics, 21 spirits brands made the Fast Track list, three more than last year’s total of 18. This year there are six new Fast Track spirits members (the three brands from last year that fell off the list all moved to the Established Growth Brand category).
Overall, there are six vodkas numbered among the 21 Fast Track brands, with four of the top-five brands being vodkas. The first, Burnett’s, leads the Fast Track, having broken through the 2 million case mark in 2012. With more than two dozen flavors, the value-priced vodka counts Candy Cane and Maple Syrup among its newer flavors.
The superpremium grape-based vodka Ciroc, imported from France, increased sales by an eye-popping 700,000 cases last year (up 53.0%), also eclipsing the 2 million case mark for the first time. Besides its original expression, the brand’s portfolio includes Red Berry, Coconut and Peach flavors. Its connection with hip-hop star and entrepreneur Sean “P. Diddy” Combs has also continued to help boost the brand’s sales.
Another value-priced vodka, UV, gained by 33.3% to reach 1.6 million cases last year. UV also features a wide range of flavored versions, with its latest launch being UV Candy Bar vodka. Tito’s Handmade, the above-premium-priced vodka from Texas, returned to the Fast Track, showing another year of amazing growth of 46.0% to 850,000 cases last year. Another Fast Track repeater, mid-priced Platinum 7X Vodka, distilled seven times, saw sales increase 19.5% last year, to 655,000 cases. New, refreshed packaging helped drive sales of the brand.
The final vodka listed here is Pearl Vodka, from Canada, which also returned to the Fast Track after another impressive year. The premium-priced brand increased its sales in 2012 by 27.1% to 216,000 cases.
Whiskey a go go
In a welcome development, there are six different whiskey brands listed in the Fast Track category—more than have ever been noted here. Two of them include the Fast Track repeaters: Jameson Irish Whiskey, which continued its tremendous sales performance last year, gaining nearly 300,000 9-liter cases, a 20.4% increase, to more than 1.6 million 9-liter cases. The brand continues to dominate the Irish whiskey category and is still one of the fastest-growing whiskey products with significant sales, percentage-wise, in the U.S. market.
The second Fast Track repeater is Pendleton, a superpremium-priced Canadian whisky, which grew to a respectable 162,000 cases in 2012. The remaining whiskies are all newcomers to the Fast Track, though well-known in the U.S. Fireball, for one, exploded in the market in 2012, more than doubling its sales to 770,000 9-liter cases. The 66-proof cinnamon-flavored whiskey has carved a niche for itself as a popular shooter.
Buchanan’s Scotch Whisky, first established in 1884, reached sales of 278,000 9-liter cases in 2012. The venerable portfolio includes Buchanan’s De Luxe, a 12-year-old blended Scotch made with a core of Dalwhinnie single malt; Buchanan’s Special Reserve, which is aged a minimum of 18 years; and top-of-the-line Buchanan’s 21-year old Red Seal.
Two American straight whiskies have joined the Fast Track. Woodford Reserve, the superpremium bourbon, gained 19.7% last year, to 176,000 9-liter cases; and Bulleit, another bourbon brand, sold the same amount, a 40.8% gain. Bulleit also debuted a new superpremium-priced rye to its lineup.
Finally, Junior Johnson’s Midnight Moon Carolina Moonshine made its first appearance on the Fast Track, gaining nearly 100,000 cases last year to 130,000 cases. Packaged in “moonshine-like” mason jars, Midnight Moon is handcrafted in small batches and includes the original 80-proof whiskey, along with 70-proof flavors of Blueberry, Apple Pie and Cherry.
Spices, flavors and premium pours
The three rums cited here are all returning members of the Fast Track, beginning with the premium-priced Sailor Jerry Spiced Navy Rum, which totaled sales of 734,000 9-liter cases. The brand has also been featuring new designs on limited-edition bottles. Calico Jack flavored rums also had a successful year. The mid-priced brand gained 13.3% in 2012, reaching sales of 340,000 cases.
The third rum, Don Q, reached 243,000 9-liter cases last year. The rum line includes the mid-priced Cristal, Gold and Añejo expressions, flavored versions of Lime, Coconut and Mojito; and an ultra-premium priced Grand Añejo rum.
Moving to the Fast Track from the Rising Star category is Wild Turkey’s line extension, the 71-proof Wild Turkey American Honey Liqueur, which reached sales of 286,000 9-liter cases—a 25.4% increase, in its fifth year on the market.
The Patron Spirits Company once again features two liqueurs in the Fast Track: Patron XO Café, a luxury coffee flavored-liqueur with a tequila base, which gained 41.9% to 210,000 cases; and Citronge Orange, which grew 11.1% last year (140,000 cases). The above-premium priced orange- and citrus-flavored liqueur is produced in Mexico with Jamaican and Haitian oranges.
The only tequila brand noted here is Milagro, returning to the Fast Track. The brand gained 11.9% in 2012 to 150,000 cases. The above-premium-priced tequila includes silver, reposado and anejo versions as well as the same higher-end Select Barrel Reserve expressions.
And once again, the only gin to make the Fast Track is Hendrick’s, the superpremium gin brand with subtle, not forward, juniper characteristics. The brand grew to 174,000 cases in 2012, a 29.9% increase.
Spirits: Rising Star Brands
Rising Star brands have been on the market four years or less and are represented here for a few reasons: They have demonstrated significant growth over a short time; they have made a notable impression in the market; or they are still relatively small (with a requirement of selling at least 20,000 9-liter cases) but show promise.
Last year the list included 37 Rising Stars; this year there are 28, with seven new brands and the rest returning members. Suggested retail prices for these Rising Stars span the range from a lineup of value-priced brands to a number of superpremium-priced products.
As we’ve said here before, the accepted wisdom in the beverage alcohol industry is that new product releases keep the industry vibrant and moving forward, whether it be flavored line extensions or completely new formulas in any number of categories. And distillers continue to play their part.
Topping the Rising Star category is New Amsterdam vodka, a companion to the successful New Amsterdam gin. The competitively priced vodka from E&J Gallo more than doubled its sales in 2012, to 650,000 cases, in only its second year on the market.
The Skinnygirl line of prepared cocktails, which was purchased by Beam in 2011, saw sales increase to 576,000 9-liter cases. The brand’s original Margarita prepared cocktail, made with natural ingredients, boasts just 100 calories per serving. Skinnygirl has been buttressed by additional line extensions, including the White Cranberry Cosmo and Sangria.
Familia Camarena tequila is repeating as a Rising Star, with eye-popping growth of 90.0% in 2012, reaching 475,000 9-liter cases. Both the silver and reposado versions are made with 100% blue agave and produced using a small-batch, pot-still distillation process. The brand is created as a superpremium product, but sells at more consumer-friendly prices.
Jack Daniel’s Tennessee Honey Liqueur, which had a phenomenal 2011 debut, followed that up with an impressive 2012, selling 464,000 9-liter cases—a 45.0% gain. Made from a blend of Jack Daniel’s Old No. 7 Tennessee Whiskey and a proprietary honey liqueur, the above-premium-priced brand is 70 proof and features notes of honey, cinnamon and spice.
Indeed, other flavored whiskey and whiskey-branded liqueurs are notable on this list. Red Stag by Jim Beam grew to sales of 341,000 cases, an increase of 35.9%.
The premium-priced, black cherry-flavored bourbon—the first of its kind—proved that a flavored bourbon can be successful in the marketplace. The brand also has two line extensions: Red Stag Honey Tea and Red Stag Spiced.
Evan Williams Honey Reserve Liqueur reached 97,000 cases in its third year on the market, growing by 38.6%. The 70-proof liqueur, a mixture of bourbon and honey, comes in 1.75-liter, 750-ml. and 50-ml. packages and sells at premium price levels.
The brand boasts a line extension launched last year, Evan Williams Cherry Reserve Liqueur, which itself produced sales of 45,000 cases.
Another well-known whiskey brand, in this case the blended Seagram’s 7 Crown, has joined the niche segment of flavored whiskies with its Seagram’s 7 Crown Dark Honey (60,000 cases), made with a combination of aged American whiskey, with hints of spice and honey. The brand also features Seagram’s 7 Crown Stone Cherry (22,000 cases).
Southern Comfort Flavors grew to 84,000 cases in 2012, an 18.3% gain. The line extension debuted with Southern Comfort Lime and was followed by Southern Comfort Fiery Pepper.
Finally, Revel Stoke, the spiced Canadian whisky, notched sales of 20,000 cases last year.
Rich rums, vibrant vodkas
Totaling 225,000 cases in its third year on the market was The Kraken Spiced Rum, for a hefty 50.0% increase. The tar-colored black rum sells for above-premium prices and boasts a rich, spicy character.
Bacardi Oakheart reached sales of 171,000 cases in 2012. Bacardi, the originator of flavored rum (with Limon), debuted Oakheart in 2011 as its first mainstream spiced rum product, joining a host of other spiced rum brands in the category’s most vibrant niche. That segment also includes the returning Rising Star Blackheart Premium Spiced Rum, a 93-proof brand that is premium-priced and features a “sultry seductress” on the label. In 2012, the brand sold 55,000 cases.
Other returning Rising Stars include the above-premium-priced Rum Chata, which exploded in the marketplace in 2012, with sales of 365,000 cases, upping its sales by more than 300,000. The liqueur is made with cream, vanilla, sugar and cinnamon, and it comes in a uniquely shaped bottle.
Jim Beam’s Devil’s Cut, a line extension of the famous bourbon, grew to 77,000 cases in 2012, a 40.0% increase. The new expression uses a proprietary process to reclaim the whiskey that has been absorbed into the barrel, resulting in a unique taste.
Three additional vodkas are also returning members of this category. The first, Rokk, is imported from Sweden and competitively priced for an import; it comes in an original version and four flavors. Rokk sales reached 225,000 cases in 2012. Wave Vodka notched 75,000 cases in 2012, more than doubling sales from the previous year.
The lineup of value-priced flavored vodkas is led by Purple Wave, a grape-flavored vodka. Vesica is a Polish, triple-distilled potato vodka. The value-priced vodka brand reached 42,000 cases last year.
Also returning to the list are Adult Chocolate Milk, a liqueur made from chocolate milk, fruit punch, limeade and orange cream, which notched 40,000 cases in 2012; and Old Mexico Tequila, featuring handcrafted, small-batch Oro and Blanco expressions, with sales of 25,000 cases in 2012.
Among the seven new Rising Stars are three vodkas that are line extensions of already established brands. First is Pucker vodka, an outgrowth of the well-known line of cordials and liqueurs. It reached sales of 162,000 cases last year.
Skinnygirl vodka, an extension of the Skinnygirl low-calorie prepared cocktail line, likewise saw impressive sales of 96,000 cases in its first year on the market.
Then there’s Little Black Dress Vodka, which borrows its brand name from the line of Little Black Dress wines targeted at female consumers. The vodka is similarly marketed to women and boasts just 100 calories for a 1.5-oz. serving. The brand sold 35,000 cases in its first year.
Voli light vodka, imported from France, is another new Rising Star that offers lower calories per serving than the leading vodka brands, and a portfolio of fruit and fusion flavors.
Rising Star newcomer Zarco is an 80-proof, above-premium-priced tequila offering silver and gold expressions. Made from blue agave, it boasts a proprietary production technique. It sold an impressive 125,000 cases in 2012.
Ole Smoky Tennessee Moonshine, made from locally-grown corn, features 6 flavors, including its 100-proof Original Moonshine and 100-proof White Lightnin’. At nearly $27 retail, it ain’t cheap but it still sold a solid 85,000 cases last year.
The final new Rising Star is Shellback Caribbean Rum from Barbados. The premium-priced Shellback includes a spiced and a silver expression, and sold 25,000 cases in its first year.
Spirits: Established Growth Brands
The Spirits Established Growth Brand category represents large-volume brands (sales of more than 400,000 cases) that increased sales over each of the past four years. As a result of the challenging economic environment of recent years, a number of the leading spirits brands, such as Bacardi and Jose Cuervo, saw sales decrease in at least one of the previous four years, thus disqualifying them from the 2013 Established Growth Brand category.
At the same time, the brands cited here—mostly mature brands—should be commended for having managed to continue their sales gains. There are a number of premium and above-premium priced brands, as well as several value-priced products. Of the 17 Established Growth Brands in 2012 (one less than in 2011), 14 return to the list from last year, and three are new to the category.
More than half of the brands here are vodkas, beginning with Smirnoff, which topped the list once again, with 2012 sales of nearly 9.9 million cases, a 2.0% gain. The brand maintained its position as the best-selling spirit in the U.S., aided by its lineup of flavored expressions.
Interestingly, three brands—all vodkas—moved from the Fast Track to established Growth Brands this year. Svedka, the Swedish import, priced lower than most other well-known imported vodkas, eclipsed sales of 3.8 million cases in 2012, a 3.7% increase. With several flavors joining the original brand, Svedka maintained its solid growth. Indeed, the brand just released two new flavors: Strawberry Colada and Orange Cream Pop.
Pinnacle vodka features an array of dynamic, offbeat line extensions (such as Whipped Cream, Key Lime Pie, Atomic Hots, Pumpkin Pie), sometimes referred to as dessert flavors, that continues to help drive its sales. The brand hit 2.55 million case sales in 2012, a 2.0% gain.
Also new to this category is Sobieski vodka, the value-priced Polish rye vodka. The brand ended 2012 with sales of 980,000 cases, a 4.3% increase. Actor Bruce Willis has been representing the brand, which also features flavor line extensions such as Orange, Karamel and Raspberry.
Other vodkas include Skyy, which gained 1.9% to more than 2.8 million cases. The above-premium-priced brand continues to promote its portfolio of Infusions natural flavored vodkas.
Another above-premium-priced vodka noted here is Three Olives, which attained sales of more than 1.5 million cases, a 3.4% increase. Imported from England, the brand boasts about 20 flavors.
The remaining returning vodkas are all so-called value-priced brands. Barton grew a respectable 5.7%, eclipsing sales of more than 2 million cases last year; Skol neared sales of 1.9 million cases (up 1.9%); and Taaka vodka notched sales of 560,000 cases, a healthy 16.7% gain.
Tequila, Bourbon, whisky and rum
There are three tequilas in the Established Growth category, with two of them featuring super- and ultra-premium expressions. Patron continued its positive sales momentum in 2012, with a notable 6.7% gain, to reach sales of 2 million cases for the first time.
The line of 1800 Tequila totaled 925,000 cases, representing a 14.9% increase—the second highest percentage gain among all the Established Growth brands. Juarez Tequila, a value brand, closed the year with sales of 810,000 cases, a 1.5% gain.
Two bourbons continued to thrive in the marketplace. The first, Evan Williams, climbed to sales of more than 1.4 million cases, a respectable 6.0% increase. The bourbon’s base brand is competitively priced; however, it also features an ultra-premium, single-barrel expression.
Meanwhile, the superpremium Maker’s Mark Bourbon is another high-end product that’s maintained its growth status, jumping another 14.4% in 2012, and nearing sales of 1.2 million cases. The brand debuted its first-ever line extension in 2011, with Maker’s 46, identified as a “bolder” Maker’s Mark.
Crown Royal, the superpremium Canadian whisky, jumped another 2.0% in 2012 to 4.12 million cases. This past November, the brand entered the flavored whisky field with its own Crown Royal Maple Finished expression. A value-priced Canadian whisky also returned to the Established Growth Brand category. Rich & Rare reached sales of 815,000 cases, and continues to promote its R&R Reserve line extension.
Finally, Admiral Nelson Spiced Rum grew an impressive 10.3%, reaching sales of 800,000 cases.
Spirits: Comeback Brands
This category recognizes those brands of significant volume that saw sales decline two years ago but rebounded in 2012. This increase, however, must result in sales totals that are at least equal to or greater than the 2010 sales totals.
This year, there is one Comeback Brand. Russian Standard vodka, which after a very small decrease in 2011, regained its sales momentum in 2012. The above-premium-priced imported vodka had sales of 218,000 cases last year, an 11.8% increase.
Wine: Fast Track Brands
Being able to offer good-tasting, fun, affordable wines is the recipe for succeeding in the wine market these days. As in previous years, the Wine Fast Track reflects the popularity of approachable, easygoing wines with clear imagery that generally sell for under $10 at retail.
This year, Wine Fast Track brands number 33, compared to 37 from last year. Twelve new brands were added this year, including three previously noted as Wine Rising Stars.
Leading the list is E&J Gallo’s Barefoot Cellars, with its expanding portfolio of varietal and other wines. Usually selling for below $10, the brand added an additional 2.7 million case sales in 2012, pushing its overall sales to 15.7 million cases—a significant 20.8% gain.
New to the Fast Track is E&J Gallo’s Barefoot Bubbly, the competitively priced line of sparkling wines, which grew 16.0% last year, to an impressive 870,000 9-liter cases. The Bubbly portfolio includes the Brut Cuvee, Extra Dry, Rosé Cuvee, Pinot Grigio Bubbly, Pink Moscato Bubbly, Red Moscato Bubbly and Moscato Spumante.
Other E&J Gallo brands making their first appearance in this category include William Hill, the Napa Valley winery that specializes in superpremium-priced, complex cabernet sauvignon and chardonnay. The brand rose 27.5% last year to sales of 255,000 cases.
Also new is E&J Gallo’s Starborough, which moved up from the Rising Star category. The New Zealand brand, which focuses on sauvignon blanc, gained 30.0% in 2012 to 130,000 cases. A returning member of the Fast Track is Gallo’s Canyon Road line of white and red varietals, which reported sales of 720,000 cases last year, a 20.0% increase.
Turning up the volume
For its part, Constellation is represented by four high-volume brands here, beginning with Black Box, featuring a lineup of bag-in-box offerings, which gained a hefty 30.2% to just under 2.7 million cases. The company also boasts two new members of the Fast Track: First is the value-priced Rex Goliath line of varietals and a Free Range Blend. The wine, with grapes sourced from California coastal vineyards, grew by 31.5% to more than 2.3 million cases.
Mark West wines, which Constellation recently purchased for $160 million, is a Sonoma County winery specializing in pinot noir—which it sells for competitive prices. Mark West reached sales of 637,000 cases last year.
The final Constellation entry is a returning Fast Track brand: the superpremium-priced Kim Crawford wines, imported from New Zealand, which sold a healthy 557,000 cases (up 22.4%).
Another supplier with several brands represented is DFV Wines (Delicato Family Vineyards). Bota Box, the company’s bag-in-box offering of varietals in 3-liter packages (priced about $15 to $17), had another stellar year in 2012, increasing sales by 27.8% to break the 2 million case mark. </