In yesterday's issue, we focused primarily on wine trends in 2017 [see WSD 01-11-2018]. Today we'll dig a little more into spirits trends, which reported healthy volume growth (more than wine and beer), and where things stand in the on and off-premise channels going into 2018.
Spirits entering distribution in the US was up 3.5% for the year, according to BW166's Total Beverage Alcohol Review. Breaking it down:
. Whisky continues growing strong with volumes up 4.7%.
. Tequila and brandy also showed strong growth with volumes up nearly 10% and 8.5%, respectively.
. Vodka volumes were up 2.2% for the year.
. Rum eked out 1.6% growth, showing that the challenged category is stabilizing.
. Gin was the big loser for the year in terms of volume, down 5.45%.
OFF PREMISE SPENDING UP 3%. Continuing a long-term consumer spending trend, beverage alcohol sales grew faster in the off-premise (2.9%) than on-premise (2.3%) in 2017, per BW166.
Although food/beverage spending off-premise outpaced alcohol spending toward the beginning of the year, 2017 ended with both the overall food/beverage category and alcohol spending up by nearly 3%.
Despite the fact that wine and spirits continue to take share from the beer category, they have been more challenged in pushing through price increases, according to BW166.
Beer "continues to perform better in terms of longer term price changes relative to other food and beverage categories." In 2017, beer prices (per 24-pack) grew 4%. Price per bottle of wine grew 1.76% for the year and spirits experienced a slight decrease in price (-0.46%) per 750 ml.
In the on-premise channel--where alcohol represents one-fourth of the dollars spent--total spending grew by about 2.8% for the year, with total alcohol spending up 2.29%.
BW166 also calculates the percent cost and markup of alcoholic products on-premise. In 2017, the percent cost was down 0.64% to about 33.5% and the markup multiple was down slightly as well to just under 3 (-0.64%).