It was a great year for upmarket spirits: In terms of volume growth for 2013, premium was up 1.6%, high-end increased 7.2% and superpremium went up 6.3%, according to Dr. Peter H. Cressy, president/CEO of the Distilled Spirits Council of the U.S. (DISCUS). Speaking at the 2014 ABI Members meeting in Las Vegas on March 24, Cressy noted that brown spirits are hot.
For instance, whiskey revenue was up 10.1% last year, boosted by the impact of flavored varieties. “It’s the first time in a long time that whiskey has eclipsed vodka in growth,” Cressy pointed out. But while vodka’s growth has slowed, it’s still the volume leader.
Tequila heating up as well; the blue agave-based spirit had an “exceptional” year, Cressy said. And though rum volume was flat, revenue was up in 2013. That’s due to the turn to higher-end, sipping rums, he added.
One of the key challenges to on-premise growth is the fact that there are fewer young people to frequent bars and restaurants, Cressy said, because there’s no growth in the coveted 24 to 34 age group. Worse yet, he said, there is historically low employment in this demographic, as the job market hasn’t been favorable to folks age 24 to 34.
Meanwhile, the demographic of consumers age 60-plus is growing, Cressy said, So operators may want to think about doing a better job of appealing to this group.
In general, Cressy said, bars and restaurants have to keep driving innovation and understanding the marketplace. Great ad campaigns on the part of the spirits brands and a strong social media presence can help, he said, as can good menu presentation, featured cocktails and a vibrant bar scene at your operation.
Something to keep in mind for brands and on-premise operators: “Spirits tastings can increase interest in premium products,” Cressy said.