DISCUS 2014 Market Report: Distilled Spirits industry delivers steady growth in the U.S

American whiskies continued to boom and spirits sales delivered steady sales in the United States in 2014, despite a challenging year, reported the Distilled Spirits Council (DISCUS) reported in February.

The Council reported that supplier sales were up 4% in 2014 to $23.1 billion, and total U.S. volume growth increased 2.2% to 210 million cases. DISCUS estimates that overall retail sales of distilled spirits in the U.S. market is nearly $70 billion, supporting hundreds of thousands of jobs in the hospitality industry and producing over $20 billion in tax revenues for all levels of government.

“Consumer interest in industry innovations and premium products from distilled spirits producers of all sizes contributed to another year of steady growth in 2014,” said Distilled Spirits Council President and CEO Peter H. Cressy. “In the U.S. market, strong consumer interest in cocktails, along with continuing market access and modernization improvements, is providing the industry with a solid base for future growth.”

Cressy cited several key factors contributing to the industry’s continued growth, including:

• A continued fascination with American Whiskeys in the U.S. and abroad

• Innovations in flavors – especially flavored whiskeys
• Premiumization across all spirits categories continued to interest consumers

• An improved regulatory and tax environment resulting in expanded market access and a relatively low number of state tax threats

• Growth of small distillers, which expanded grassroots and overall interest in the spirits category

American Whiskey Boom Continues to Benefit Producers Large and Small
Flavored whiskeys continued their strong growth, to some extent drawing consumers from other categories but also attracting adult consumers who are new to distilled spirits, said Council Chief Economist David Ozgo. Flavored products, whether vodka, rum or whiskey, grew by 1.9 million cases.

Bourbon and Tennessee Whiskey volumes were up 7.4% to over 19 million cases, generating $2.7 billion in industry revenue; both Irish Whiskey and Single Malt Scotch continued their rapid growth with volumes up 9.1% and 6.4% respectively; Cognac volumes were also up an impressive 11.4%; and Tequila volumes grew 5.0%. While flavored vodka sales were off, traditional Vodka volumes were up 3.7%.

Spirits Exports up 3.7%; Predicted to Hit Fifth Year Record High
Council Senior Vice President for International Trade Christine LoCascio predicted that American spirits exports in 2014 would grow 3.7% to a total $1.56 billion (projected), for the fifth straight year of record exports.

“The industry anticipates its fifth straight year of record exports through a combination of market opening agreements, innovative marketing programs by individual companies and the spirits industry’s export promotion program,” LoCascio said. “Despite the strong dollar headwinds in the second half of the year, premium American spirits are finding new audiences globally, in both traditional and emerging markets.”

The projected top five 2014 export markets for all American distilled spirits by dollar value were: Canada, $212.6 million; UK $177.6 million; Germany, $136.7 million; Australia, $131.2 million; and France, $111.6 million.

The top five markets by percentage growth were: Brazil (+208%), Dominican Republic (+76%), Bahamas (+50%), Israel (+43%) and United Arab Emirates (+42%).

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