Premium Spirits Sales Boomed This Year Thanks to Better Home Bars and Big Nights Out
According to a recent report from the Distilled Spirits Council, the luxury spirits sector has shown strong growth over the past year, a trend that has been consistent over the past half-decade. After all, someone’s drinking all those bottles of Patron, The Macallan, Hennessy XO and Pappy Van Winkle (or at least holding onto them as collector’s items).
The findings of the DISCUS Luxury Brand Index focus on the third quarter of 2022, showing that sales grew by 15 percent compared to the same quarter of 2021. This index tracks brands that have bottles priced above $50 (with many well above that, of course). “While inflation continues to cut into consumers’ discretionary incomes, a special bottle of spirits remains an attainable luxury that brings great pleasure to many adults,” said Christine LoCascio, Distilled Spirits Council chief of policy and strategy, in a statement. “Sales of luxury spirits are also being buoyed by the resurgence of restaurants and bars coming out of the pandemic, as well as consumers elevating their cocktail experiences and bars at home.”
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The at-home drinking experience seems like a key component to these numbers, given the effect that the pandemic has had upon on-premise sales, although these numbers are climbing steadily again as people continue to return to bars and restaurants. Other factors might also have come into play, like the rise in premium celebrity brands and the lifestyle marketing around them, as well as the “treat yourself” mentality that people have found comfort in as well over the past two years. And then there’s the rapidly growing rare and collectible whisky market, which we reported on recently.
We’ve also reported on the news that tequila and agave spirits are set to outpace American whiskey sales in the US in the near future, but in the third quarter of 2022 tequila (29 percent) was actually edged out by bourbon and rye (33 percent). Still, a look at the trend over the last five years shows tequila just beating American whiskey in this very competitive market, 44 to 43 percent, so this prediction is still likely to play out. Irish whiskey remained basically the same as last year with a 17 percent rise compared to 19 percent a year ago. And Japanese whisky saw 20 percent growth despite two years of decline from 2020 to 2021. It looks like that bubble has not yet burst, but it’s maybe not as frothy anymore, which is why you can actually find a bottle of Yamazaki 12 these days.
According to data from The Business Research Company, the spirits market as a whole had a compound annual growth rate of just over nine percent from 2021 to 2022, an increase from about $131 billion to $143 billion. These are still huge numbers, but the report cites the war in Ukraine and the continuing effects of the pandemic as mitigating factors. That makes the growth of premium brands look especially good, with an average rate of 23 percent over the last half decade showing that this market has steady legs. And there’s no question that brands and distilleries like The Dalmore, Buffalo Trace and Angel’s Envy are toasting to that.
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