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-duane
Tuesday, February 26, 2008
Spirits, Wine and Beer Continue to Grow, but Industry Boom has Slowed
Feb. 26 /PRNewswire/ -- Trading up to higher quality spirits, wine and beer continued to fuel beverage alcohol industry growth in 2007, but the rates of growth slowed compared to previous boom years, and results were mixed among the three main segments of the business. Wine consumption increased 4% while spirits grew 3.2% and beer rose just 1.2%, according to the just-released 2008 Handbook Advance published by The Beverage Information Group, a division of business publisher M2MEDIA360.
The weakening U.S. economy was a major contributor to the slowdown, especially at restaurants and bars so key to the decade-long expansion of spirits and wine.
Still, the distilled spirits business was up (reaching 182.4 million 9-liter cases) for the tenth consecutive year, wine sales grew for the 14th consecutive year (hitting 294.4 million cases) and beer recovered for the second year in a row from a drop in 2005 (marking 2.93 billion cases).
"Inventive marketing and more approachable products have helped increase wine's appeal to a younger segment of the adult population," said Eric Schmidt, manager of information services for The Beverage Information Group. "Spirits still grew, but the effect of the slowing economy on restaurant consumption is apparent. Meanwhile, though beer showed strength this year, it is still losing share to wine and spirits, and the weakness of imports in 2007 could bode poorly for the future."
Wine continued to find favor with new legal-age drinkers, American craft beers continued a run of double-digit growth, and imported spirits showed great strength last year.
High-end products across all categories continued to outperform the business as a whole. For example, in 2006, generally more expensive imported spirits accounted for 39.7% of consumption. By 2007, it hit 40.3%.
Vodka, the single largest spirit category, grew 6.7% in 2007 -- the category now accounts for 28.9% of the spirits business. Rum, the second largest spirit category, also showed power, growing 5.1%. Tequila and Irish whiskey, both substantially smaller in volume than vodka and rum, posted impressive gains of 9.4% and 17.5%, respectively. Losing ground were blended whiskey (down 1.9%), Canadian whisky (down 0.6%), and prepared cocktails (down 5%).
Among table wines, which account for more than 91% of U.S. wine consumption, almost every country exporting to the U.S. showed growth last year, with Italy (up 8.8%) and France (up 6.6%) leading the way. Australia stayed flat last year, perhaps partly due to the slower growth of Yellow Tail, the leading imported wine in the U.S. Imported table wines grew faster last year (+7.6%) versus domestics (+3.1%), though domestic wines still dominate the business, with 66.9% coming from the U.S.
Craft and light beers were the main bright spots among beers; though imports advanced, it was at a much slower pace than previous years. Among premium, popular, malt liquor, ice and flavored malt beverages, only ice beer grew in 2007. Total beer consumption rose 1.2% or 35.7 million cases to 2.93 billion 2.25 gallon cases. Light beers grew 2.5% and now represent 51.1% of the whole beer market.
Dollar sales outpaced volume sales across all segments in 2007, with on-premise sales up 8.3%, and off-premise sales up 5.0%. Total sales for 2007 reached $188.7 billion.
The weakening U.S. economy was a major contributor to the slowdown, especially at restaurants and bars so key to the decade-long expansion of spirits and wine.
Still, the distilled spirits business was up (reaching 182.4 million 9-liter cases) for the tenth consecutive year, wine sales grew for the 14th consecutive year (hitting 294.4 million cases) and beer recovered for the second year in a row from a drop in 2005 (marking 2.93 billion cases).
"Inventive marketing and more approachable products have helped increase wine's appeal to a younger segment of the adult population," said Eric Schmidt, manager of information services for The Beverage Information Group. "Spirits still grew, but the effect of the slowing economy on restaurant consumption is apparent. Meanwhile, though beer showed strength this year, it is still losing share to wine and spirits, and the weakness of imports in 2007 could bode poorly for the future."
Wine continued to find favor with new legal-age drinkers, American craft beers continued a run of double-digit growth, and imported spirits showed great strength last year.
High-end products across all categories continued to outperform the business as a whole. For example, in 2006, generally more expensive imported spirits accounted for 39.7% of consumption. By 2007, it hit 40.3%.
Vodka, the single largest spirit category, grew 6.7% in 2007 -- the category now accounts for 28.9% of the spirits business. Rum, the second largest spirit category, also showed power, growing 5.1%. Tequila and Irish whiskey, both substantially smaller in volume than vodka and rum, posted impressive gains of 9.4% and 17.5%, respectively. Losing ground were blended whiskey (down 1.9%), Canadian whisky (down 0.6%), and prepared cocktails (down 5%).
Among table wines, which account for more than 91% of U.S. wine consumption, almost every country exporting to the U.S. showed growth last year, with Italy (up 8.8%) and France (up 6.6%) leading the way. Australia stayed flat last year, perhaps partly due to the slower growth of Yellow Tail, the leading imported wine in the U.S. Imported table wines grew faster last year (+7.6%) versus domestics (+3.1%), though domestic wines still dominate the business, with 66.9% coming from the U.S.
Craft and light beers were the main bright spots among beers; though imports advanced, it was at a much slower pace than previous years. Among premium, popular, malt liquor, ice and flavored malt beverages, only ice beer grew in 2007. Total beer consumption rose 1.2% or 35.7 million cases to 2.93 billion 2.25 gallon cases. Light beers grew 2.5% and now represent 51.1% of the whole beer market.
Dollar sales outpaced volume sales across all segments in 2007, with on-premise sales up 8.3%, and off-premise sales up 5.0%. Total sales for 2007 reached $188.7 billion.
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