Description

Spirits continue to enjoy growth in both dollar and volume sales, outperforming beer and wine. Consumer interest in craft production, brand stories and premium drinking experiences has propelled many spirit brands, especially high end and super premium spirits. Though total US alcohol consumption is in decline, high end and super premium spirits have a bright future, as consumers are generally drinking less but spending more per drink. Vodka remains the most popular spirit by far but consumers are gaining a new appreciation for both tequila and gin.

Caleb Bryant, Associate Director – Food & Drink

This report will look at the following areas:

  • The alcohol industry will need to adapt to Gen Z
  • Flagship vodka and rum brands underperform
  • Decline in value brands emblematic of the entire alcohol market

Table of Contents

  1. Overview

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

    • Top takeaways
    • The issues
    • The alcohol industry will need to adapt to Gen Z
      • Figure 1: Spirit behaviors, by generation, September 2019
    • Flagship vodka and rum brands underperform
      • Figure 2: Change in select vodka brands, in thousand 9-liter cases, change 2017-18
      • Figure 3: Change in select rum brands, in thousand 9-liter cases, change 2017-18
    • Decline in value brands emblematic of the entire alcohol market
      • Figure 4: Percent change in volume sales (9-liter cases sold), 2013-18
    • The opportunities
    • Cheers to tequila
      • Figure 5: Total US volume sales and forecast of tequila, 2014-22
    • Boomers can upgrade their spirit purchases
      • Figure 6: At-home cocktail attitudes and spirit attitudes, by generation, September 2019
    • Millennials eager to try new spirits, even booze-less spirits
      • Figure 7: Product interest, September 2019
    • What it means
  3. The Market – What You Need to Know

    • Spirits outperform other alcohol types
    • New challengers threaten spirits
    • Alcohol abstention and moderation grows
  4. Market Size and Forecast

    • Spirits market enjoys continued growth
      • Figure 8: Total US sales and fan chart forecast of distilled spirits, at current prices, 2014-24
      • Figure 9: Total US sales and fan chart forecast of distilled spirits, at current prices, 2014-24
  5. Market Breakdown

    • Tequila is a star spirit
      • Figure 10: Total US volume sales and forecast of white spirits, by segment, 2014-22
      • Figure 11: Total US volume sales and forecast of white spirits, by segment, 2014-22
      • Figure 12: Percent change in 9-liter cases sold, 2013-18
    • Gains in on-premise spirit sales
      • Figure 13: US volume sales of total distilled spirits, by channel, 2014-18
      • Figure 14: US volume sales of total distilled spirits, by channel, 2014-18
  6. Market Perspective

    • Hard seltzers upend the alcohol market
      • Figure 15: White Claw Pure Hard Seltzer
    • Dark spirits outpace white
      • Figure 16: Total US volume sales and forecast of dark spirits, by segment, 2014-22
      • Figure 17: US volume sales of whiskey/whisky, by type, 2014-19
    • Haze lingers over the cannabis market
      • Figure 18: Attitudes/behaviors, October 2019
      • Figure 19: Reasons for using cannabis, October 2019
  7. Market Factors

    • Trade wars linger on
    • “Sober curious” and “mindful drinking” are entering the zeitgeist
      • Figure 20: Dry January mentions on social media, 2013-19
  8. Key Players – What You Need to Know

    • Tequila’s winning streak continues
    • Growth of super premium gin a sign of things to come
    • Technology creates new spirit opportunities
  9. What’s Working

    • Tequila can be the new Scotch
    • Flavored rums can cut into vodka’s market share
    • Cocktail culture alive and well
      • Figure 21: Incidence of spirits used in cocktails, select spirit types, Q3 2016 – Q3 2019
  10. What’s Struggling

    • It’s Tito’s world; other vodka brands are just living in it
  11. What to Watch

    • Gin has permission to be bold
    • A golden age for RTD cocktails?
    • AR packaging can enhance a brand’s story
    • Online spirit sales will grow slowly but surely
      • Figure 22: Reasons for not buying alcohol online, August 2019
      • Figure 23: Online alcohol purchase drivers, August 2019
  12. The Consumer – What You Need to Know

    • Millennials are the most important consumer group for spirit brands
    • Higher end brands can capture new drinking occasions
    • Boomers are primed for trading up
    • Gen Z may respond to the stories behind spirit brands
  13. Alcohol Consumption

    • White spirits lead dark
      • Figure 24: Alcohol consumption, net any consumption, September 2019
    • Hispanics and Millennials overindex as white spirit drinkers
      • Figure 25: White/dark spirit drinker demographics, indexed against all consumers, September 2019
  14. White Spirit Consumption

    • Vodka dominates the white spirits market
      • Figure 26: White spirit consumption, among white spirit drinkers, September 2019
    • Millennials remain core white spirit drinkers
      • Figure 27: White spirit consumption, among white spirit drinkers, by generation, September 2019
    • Build white spirit brand loyalty among Hispanics
      • Figure 28: White spirit consumption, among white spirit drinkers, by race/ethnicity, September 2019
  15. Reasons for Not Drinking White Spirits

    • Ease new consumers into the market
      • Figure 29: Reasons for not drinking white spirits, September 2019
  16. Spirit Brand Tier Purchases

    • White spirits are under-represented in the super premium brand tier
      • Figure 30: Spirit brand tier purchases, among exclusive spirit type drinkers, September 2019
    • Millennials may be premium drinkers, but don’t neglect older consumers
      • Figure 31: Spirit brand tier purchases, by generation, September 2019
  17. Spirit Occasions by Brand Tier

    • Higher end brands have greatest cross-occasion potential
      • Figure 32: Correspondence analysis, spirit occasions by brand type, September 2019
      • Figure 33: Spirit occasions by brand type, September 2019
  18. Making Cocktails at Home

    • Take cocktail culture from the bar to the home
      • Figure 34: At home cocktail attitudes, among spirit drinkers who make cocktails at home, by exclusive spirit type consumed, September 2019
    • Boomers have an underlying interest in cocktails
      • Figure 35: At home cocktail attitudes, among spirit drinkers who make cocktails at home, by generation, September 2019
    • Ecommerce can satisfy the home bartender
      • Figure 36: At-home cocktail attitudes, among spirit drinkers who make cocktails at home, by spirit behaviors, September 2019
  19. Spirit Flavor Interest

    • Favorite familiars can give way to exciting flavors
      • Figure 37: Spirit flavor interest, by exclusive spirit type drinkers, September 2019
    • Gin drinkers like adventure, while rum drinkers prefer indulgence
      • Figure 38: Spirit flavor interest, by type of white spirit consumed, September 2019
    • Fail fast with new flavors sold online
      • Figure 39: Spirit flavor interest, by spirit behaviors, September 2019
  20. Spirit Behaviors

    • Shifting attitudes toward alcohol apparent among Gen Z
      • Figure 40: Spirit behaviors, by generation, September 2019
  21. Spirit Product Interest

    • Harness the success of hard seltzers
      • Figure 41: Product interest, among exclusive spirit type drinkers, September 2019
    • Alcohol alternatives need to be premium
      • Figure 42: Product interest, by white spirit brand tier drinkers, September 2019
    • Mocktail by day, mixer by night
      • Figure 43: Product interest, by white spirit brand tier drinkers, September 2019
  22. Spirit Attitudes

    • Spirits aren’t healthful but are less bad than beer
      • Figure 44: Spirit attitudes, among exclusive spirit type drinkers, September 2019
      • Figure 45: Spirit attitudes, by food/drink shopper segmentation, September 2019
    • Gen Z needs guidance
      • Figure 46: Spirit attitudes, by generation, September 2019
      • Figure 47: Spirit attitudes, by generation, September 2019
    • Focus on the craft of gin
      • Figure 48: Spirit attitudes, by type of white spirit consumed, September 2019
  23. Spirit Purchasing Behaviors

    • Consumers know what they want but are open to suggestions
      • Figure 49: Spirit purchasing behaviors, among exclusive spirit type drinkers, September 2019
    • Gen Z shops with an open mind
      • Figure 50: Spirit purchasing behaviors, by generation, September 2019
  24. White Spirit Associations

    • White space exists for each white spirit type
      • Figure 51: White spirit associations by spirit type, rebased among spirit type drinkers, September 2019
  25. Appendix – Data Sources and Abbreviations

    • Data sources
    • Sales data
    • Fan chart forecast
    • Consumer survey data
      • Figure 52: Vodka brand tier definition
      • Figure 53: Rum brand tier definition
      • Figure 54: Tequila brand tier definition
      • Figure 55: Gin brand tier definition
    • Mintel Menu Insights
    • Mintel Food and Drink Shopper Segmentation
    • Abbreviations and terms
    • Abbreviations
  26. Appendix – The Market

      • Figure 56: Total US sales and forecast of distilled spirits, at inflation-adjusted prices, 2014-24
      • Figure 57: US volume sales and forecast of white spirits, 2014-22
      • Figure 58: Total US volume sales of white spirits, by segment, 2017 and 2019

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