Description

“Dark spirits had another year of growth posting strong five-year growth driven by consumer interest in premium drinks, craft offerings and even cocktail culture keeping the category well positioned with its base for the future. Yet, optimal growth will hinge not only on nudging upgrades from dedicated consumers to even more premium products, but also expanding reach to Gen Z and women with cocktail recipes featuring softer flavors, casualization through RTD and healthy innovation.”

Mimi Bonnett, Director – Food and Drink, Foodservice

This report will look at the following areas:

  • Dark spirits characterized as an “old man’s drink”
  • Non-drinkers just don’t think dark spirits are for them

Table of Contents

  1. Overview

    • What you need to know
    • Definition
  2. Executive Summary

    • Market overview
    • Five-year growth anchored by robust whiskey/whisky sales
      • Figure 1: Total US volume sales and forecast of dark spirits, by segment, 2014-22
    • The issues
    • Dark spirits characterized as an “old man’s drink”
      • Figure 2: White/dark spirit drinker demographics, September 2019
    • Non-drinkers just don’t think dark spirits are for them
      • Figure 3: Reasons for not drinking dark spirits, September 2019
    • The opportunities
    • Millennials are engaged; don’t forget everyone else
      • Figure 4: Dark spirit consumption, among dark spirit drinkers, by generation, Part I, September 2019
    • Cocktails are the path to expanding the base
      • Figure 5: Make cocktails at home, by key demographics, September 2019
    • Keep it casual, premium, and lean into healthy innovation
      • Figure 6: Product interest, by generation, September 2019
  3. The Market – What You Need to Know

    • Spirits top $67 billion, trend expected to continue
    • American and Irish whiskeys drive growth
    • Trade wars, wellness trends and cannabis legalization pose challenges
  4. Market Size and Forecast

    • Continued growth of $67 billion spirit market
      • Figure 7: Total US sales and fan chart forecast of distilled spirits, at current prices, 2014-2024
      • Figure 8: Total US sales and forecast of distilled spirits, at current prices, 2013-23
  5. Market Breakdown

    • Whiskey/scotch/bourbon comprise leading share
      • Figure 9: Total market share of volume sales, by segment, 2019
    • From 2017-19, brandy, cognac and Armagnac build share
      • Figure 10: Total US volume sales and forecast of dark spirits, by segment, 2017-2019
    • Five-year trends show long-term growth of whiskey/whisky
      • Figure 11: Total US volume sales and forecast of dark spirits, by segment, 2014-22
      • Figure 12: US volume sales of whiskey/whisky, by type, 2014-19
    • Straight American whisky and Irish whiskey drive sales and build share
      • Figure 13: US volume sales of whiskey/whisky, by type, 2014-19
      • Figure 14: US volume sales of whiskey/whisky, by type, market share, 2017 and 2019
    • On-premise spirit sales make gains
      • Figure 15: US volume sales of total distilled spirits, by channel, 2014-18
  6. Market Perspective

    • Dark sprits are fourth most widely consumed alcoholic beverage
      • Figure 16: Alcohol consumption, most often and also drink, September 2019
    • Spirits sales growth outpaces both wine and beer
      • Figure 17: US retail market size, spirits and wine/sparkling wine, 2017-19
    • White spirit innovation could undercut dark spirit’s growth
      • Figure 18: Distribution of spirits sales by volume, by segment, 2019 (estimate)
      • Figure 19: Total US volume sales of spirits, by segment, 2017 and 2019
    • RTD alcoholic beverages = competitive opportunity
      • Figure 20: Total US volume sales and forecast of flavored malt beverages, 2014-22
      • Figure 21: Total US volume sales and forecast of spirits-based prepared cocktails, 2014-22
    • Spirit drinkers enjoy at-home cocktail making, seek premium mixers
    • Cannabis legalization keeps brands on edge
      • Figure 22: Reasons for using cannabis, October 2019
  7. Market Factors

    • Trade wars impact whiskey sales
    • Engaging Gen Z is a challenge
      • Figure 23: consumption of dark spirits, by generation, September 2019
    • Wellness and social trends may spur reduced, selective consumption
  8. Key Players – What You Need to Know

    • American and Irish whiskeys enjoy strong growth
    • Brandy, cognac and Armagnac continue to build share
    • Canadian whiskey and scotch see sales flag, and value brands struggle
    • Brands should be poised for ecommerce sales
  9. What’s Working?

    • American and Irish whiskeys propel the market forward
      • Figure 24: US Spirits market – whisky and scotch change in volume sales, by brand tier – 2018
    • Whiskey – especially bourbon – also benefit from strong presence on cocktail menus
      • Figure 25: Bourbon cocktails – 2019
    • Limited editions celebrate pop culture
    • Small distilleries grow craft spirits
    • Brandy, cognac and Armagnac continue to grow share
  10. What’s Struggling?

    • Trade wars dampen scotch sales; Canadian whiskey lags
    • Demand for premium leaves value spirits in decline
    • Trade war likely to dampen overseas growth
    • Rum sales comparably lackluster, with potential at the high end
  11. What to Watch

    • Opportunities in online retail and subscription services
    • Mobile apps may be valued by Millennials and engage with Gen Z
  12. The Consumer – What You Need to Know

    • Millennials drive dark spirit consumption
    • Expand the base with women and Gen Z
    • Cocktail recipes, premium mixers can take the edge off
    • Premium innovation can widen the base
  13. Alcohol Consumption

    • About a third consume dark spirits
      • Figure 26: Alcohol consumption, most often and also drink, September 2019
    • Spirits “on the rocks” enjoy premium associations
      • Figure 27: Associations with alcoholic beverages, July 2019
    • Dark spirits consumer base skews male, older and more affluent
      • Figure 28: White/dark spirit drinker demographics, September 2019
  14. Change in Dark Spirit Consumption

    • Increased consumption of dark spirits buoys market
      • Figure 29: change in alcohol consumption, September 2019
    • Millennials most likely to be increasing usage
      • Figure 30: change in dark spirits consumption, by generation, September 2019
  15. Types of Dark Spirits

    • Bourbon and American whiskey continue to dominate
      • Figure 31: Dark spirit consumption, among dark spirit drinkers, September 2019
    • Opportunities with women in rum, flavored whisky, brandy/cognac
      • Figure 32: Dark spirit consumption, among dark spirit drinkers, by gender, September 2019
    • Millennials have broad palates and dark spirit repertoires
      • Figure 33: Dark spirit consumption, among dark spirit drinkers, by generation, September 2019
    • Medium income HHs enjoy range of spirits, as everyday luxury
      • Figure 34: Dark spirit consumption, among dark spirit drinkers, by HH income, September 2019
  16. Reasons for Not Drinking Dark Spirits

    • Taste limits usage
      • Figure 35: Reasons for not drinking dark spirits, September 2019
    • Taste is a hurdle for women; health and cost deter some men
      • Figure 36: Reasons for not drinking dark spirits, by gender, September 2019
    • Gen Z barriers can be overcome
      • Figure 37: Reasons for not drinking dark spirits, by generation, September 2019
  17. Spirit Brand Tier Purchases

    • Popular and higher end spirits brands are most widely used
      • Figure 38: Spirit brand tier purchases, among exclusive spirit type drinkers, September 2019
    • Millennials stand out as key to the super premium market
      • Figure 39: Spirit brand tier purchases, by generation, September 2019
    • Income is a leading factor shaping brand choice
      • Figure 40: Spirit brand tier purchases, by HH income, September 2019
  18. Spirit Occasions by Brand Tier

    • Occasion drives tier choice
      • Figure 41: Correspondence Analysis – Symmetrical map – Spirit occasions by brand type, September 2019
      • Figure 42: Spirit occasions by brand type, September 2019
  19. Making Cocktails At Home

    • More than three quarters of spirit consumers make cocktails at home
      • Figure 43: Make cocktails at home, by key demographics, September 2019
    • More than half enjoy making cocktails from scratch
      • Figure 44: At home cocktail attitudes, among spirit drinkers who make cocktails at home, among exclusive spirit type drinkers, September 2019
    • Millennials like cocktails at home
      • Figure 45: At home cocktail attitudes, among spirit drinkers who make cocktails at home, by generation, September 2019
  20. Spirit Flavor Interest

    • In dark spirits, smoky and spicy flavors lead
      • Figure 46: Spirit flavor interest, among exclusive spirit type drinkers, September 2019
    • Women seek sweet, fruity and floral flavors in their spirits
      • Figure 47: Spirit flavor interest, by gender, September 2019
    • Millennials seek range of subtle flavors, while Gen Z wants dessert
      • Figure 48: Spirit flavor interest, by generation, September 2019
  21. Spirit Behaviors

    • Almost a third of Gen Z have taken a break from alcohol
      • Figure 49: Spirit behaviors, by generation, September 2019
  22. Spirit Product Interest

    • Robust opportunity in RTDs, functional and premium spirits
      • Figure 50: Product interest, among exclusive spirit type drinkers, September 2019
    • RTD with added health benefits may be a gateway for women to dark spirits
      • Figure 51: Product interest, by gender, September 2019
      • Figure 52: Product interest, by generation, September 2019
  23. Spirit Attitudes

    • Craft is at the heart of premium for dark spirits drinkers
      • Figure 53: Spirit attitudes, among exclusive spirit type drinkers, September 2019
    • Gen Z is ripe for education and outreach
      • Figure 54: Spirit attitudes, by generation, September 2019
      • Figure 55: Health-related Spirit attitudes, by generation, September 2019
  24. Spirit Purchasing Behaviors

    • About half know what brand they want, but still like to browse
      • Figure 56: Spirit purchasing behaviors, among exclusive spirit type drinkers, September 2019
    • Men more likely to have set brand allegiance, but be nudged by sales
      • Figure 57: Spirit purchasing behaviors, by gender, September 2019
    • Gen Zs and Millennials open to browsing, reviews, recommendations
      • Figure 58: Spirit purchasing behaviors, by generation, September 2019
  25. Dark Spirit Associations

    • Spirits you gift may be different from what you purchase for yourself
      • Figure 59: Correspondence Analysis – Symmetrical map – Dark spirit associations, September 2019
      • Figure 60: Dark spirit associations, September 2019
  26. Appendix – Data Sources and Abbreviations

    • Data sources
    • Sales data
    • Fan chart forecast
    • Consumer survey data
    • Consumer qualitative research
    • Mintel Menu Insights
    • Purchase Intelligence
    • Mintel Market Sizes
    • Mintel Food and Drink shopper segmentation
    • Social media methodology
    • Corrrespondence Analysis – Methodology
    • TURF analysis – methodology
    • Abbreviations and terms
    • Abbreviations
  27. Appendix – The Market

      • Figure 61: Total US sales and forecast of distilled spirits, at inflation-adjusted prices, 2014-24
      • Figure 62: US volume sales and forecast of dark spirits, 2014-22
      • Figure 63: US volume sales and forecast of dark spirits, by segment, 2014-22
      • Figure 64: US volume sales of dark and white distilled spirits, by channel, 2014-18

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