Spirits Industry “Recession Resilient”February 8, 2010 By: Donna Hood Crecca
Citing figures that show distilled spirits volume grew 1.4 percent but revenue held steady at $18.7 billion in 2009, Distilled Spirits Council CEO Dr. Peter Cressy referred to the industry as “recession resilient” during an analyst and media briefing in New York City recently. Trading down affected spirits revenues, and a consumer shift to off-premise consumption led to that segment growing 2.2 percent while on-premise spirits volume declined 3 percent.
Cressy expressed optimism that a return of consumer confidence, which should re-invigorate on-premise sales, will spark growth in 2010 and beyond. However, he warned that regulators must be urged not to impose higher alcohol taxes in their quest for greater revenues. “Restaurants and bars have closed in every city and town in the nation during this recession,” he said. “Policy makers should not compound the damage and threaten the recovery by raising hospitality taxes at this time.”
As for specific category performance in 2009, vodka revenue grew by $75 million to reach $4.6 billion and comprise 30 percent of volume and 24 percent of revenue. Value-priced vodkas grew 10.6 percent. Rum volume increased 1.2 percent and revenue 0.8 percent, with value brands growing 4.4 percent and high-end rums declining. Tequila case volume rose 5.2 percent, with value brands jumping 21 percent, premium up 1.5 percent and super-premium experiencing 1.0 percent growth. Total whiskey volume slipped 0.7 percent, although Irish whiskey increased 10.2 percent, blends grew 3.4 percent and Scotch 2.5 percent for the year.