Bourbon Is Big And Getting Bigger
Distilled Spirits Council Releases Growth Report
Every year the Distilled Spirits Council of the United States releases their market report. It’s 40 pages of boring graphs and bad stock images. Since I’m well versed in both I decided to pull out the interesting parts for the Bourbonr readers.
If you’d like to read the full report you can do so here: Distilled_Spirits_Industry_Briefing_Feb_3_2015_Final
DISCUS Annual Growth Report Summary
– U.S. Spirit sales are up 4.0% in 2014 hitting $23.1B in sales. That’s almost a $1B (yes, that’s a “B”) increase over last year.
– Bourbon/Tennessee Whiskey growth by volume is up 7.4% and revenues are up 9.6%. Unsurprisingly, while demand rises so do prices.
– Super Premium have seen the most growth in the Bourbon/Tennessee Whiskey sector with 19.2% growth by volume and by revenue. DISCUS considers >$30+ to be “super premium”.
– Bad news, flavored whiskies continue to grow so be prepared to see ranch flavored whiskey on the shelf soon.
– Bourbon/Tennessee Whiskey were significant growth drivers, in the total of the U.S. Spirits growth, along with Flavored Whiskey, Irish, Tequila and Cognac.
– Expect more craft distillers. This segment increased from 700,000 cases in 2010 to 3,500,000 in 2014 and shows no signs of slowing down.
– Bourbon/Tennessee Whiskey hit another all time high in exports with $1.2B in 2014
– Are lower end spirits now going in higher end bottles? Some figures point in that direction. How does “value” liquor drop 1.3% with all other price segments experiencing growth?
10 comments
Can’t find any of the premium bourbons you discuss, in the Houston area. Any suggestions how to find some of the premium brands ( I don’t mean Pappy)?
Which brands are you looking for? Spec’s is always a good place to start
Yes, the Spec’s warehouse on Smith is the best place to look. I even got a bottle of Pappy there a couple years ago. They have not had any since.
If you are on the SE side of Houston…..Nasa Liquor in Clear Lake has really stepped their game up in the premium whisk(e)y department.
I think of super premium at >$50 or so. The market is flooded with Bourbons in the $30 range. I can’t wait for bourbon craze to go away, and then the distilleries will have to sale their surplus of bourbon for cheap!! And I will be able to find stuff I like to drink!!
I think the biggest concern is that there won’t be a return to low prices, just a temporary freeze on existing prices. With the current bourbon craze, scotch is taking a hit but there’s been no price cuts there. Distilleries will most likely just sit on surplus stocks in hopes that the trends are cyclical and when the future craze hits again, they’ll look to unload their reserves touting a return to age statements at…you guessed it…even higher prices.
Completely agree. Scotch never took a price hit–just flatlined. It’s on par, pricewise, with American sipping whiskey of similar quality. There are still standouts in the low/mid-shelf American whiskey market that are value winners over anything coming out of the U.K., but at mid/high-shelf, the value is very similar.
In the meantime, the growth of American whiskey has created support for countless new distilleries and labels, many of whom are creating interesting whiskeys( few of which are creating whiskeys that are worth the prices being asked).
My hope is that the accelerated support of American distillers will keep many of them afloat until their own barrels actually hit decent ages (minimum 4+ years, but better yet ~8 years). When that happens, my hope is that the quality will go up without a corresponding price inflation. Many small distillers are charging outrageous prices for mediocre whiskey. But if people keep spending it anyway, that investment will hopefully pay off in a few years as their quality improves with the age of their stocks.
I must admit, I look forward ranch flavored anything. That could be the push I need to finally purchase another bottle of bourbon.
Blake – I agree in your thought about the lower end spirits ending up in premium bottles, but also, the prices on several previously “value” brands has also increased enough to move them into a”premium” brand territory, or higher. As an example across a different range, Old Forester Single Barrel would have been considered “high end” up until more recently when it went over $30 a bottle. So cheaper whiskey is ending up in bottles considered “premium” and up, but it may actually be (in some cases – not all) the exact same juice. Therefore, accounting for some of the loss in “value” and growth in other. Of course, it only makes sense when the market is crazy that many distillers will make a move to sell more of the young (value) stuff, especially considering the lack of supply for this demand, in a higher end brand to make more money off of it. Thankfully, not all the distillers are making that move, just some. Just another consideration to the gap.
It’s to the point that drinking anything from Buffalo Trace is not worth the energy any longer. SO(!!) Many retailers are jacking the snot out of prices. Either because they think that just because the a name relates to the BTAC or Van Winkle they can demand a higher price.
Examples —
Sazerac — $69.99!!?? Elmer T Lee — $69.99!!?? One place has ETL for $399.99!!!??? Stagg Jr. — $100.00 to $200.00!!?? Eagle Rare 10 $89.99!!!??? WL Weller 12 $80.00!!?? WL Weller Res. $40.00!!??
These retailers are completely clueless!!
Drink more WT101. It’s better for you!!