The Future of Spirits: What to Expect the Next 5 Years

IWSR

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Spirits growth in the US is predicted to be "slow and steady" over the next few years, according to a report made by the firm International Wine and Spirits Research (IWSR).

The market for spirits here is predicted to grow 1.1%, a rate IWSR says is only marginally below its 5-year growth rate. Overall volumes will grow to more than 225 million 9-liter cases, adding 12 million cases to the current total. But volume will not remain the same within categories, the report predicts.

As the Millennial age cohort becomes more important in the spirits sector, product creation with variations in style, packaging, and flavor will become more important for spirits overall. That impulse to offer something unusual can be seen even among giant brands, as in Absolut’s Our/Vodka, in which different cities distill vodka under their own name. (Absolut’s program hit a snag last week when the company closed down its Seattle operation due in part to increased competition in the city. Pernod Ricard is said to be committed to the locally-produced vodka idea, with more US distilleries set to open in the coming months.)

Bourbon is expected to continue its remarkable growth rate, as more than 25% of all spirits drinks consumed in the US involve whisky of one sort or another. The report predicts that by 2021, volumes will increase by more than 10 million cases, moving the category to almost 70 million cases for the first time.

Meanwhile, so-called craft spirits and the trend toward premiumization are expected to continue to drive the sectors of premium, super-premium and ultra-premium. In addition, IWSR predicts a rapid growth in price points between $40 and $50, and a surprising growth in line extensions priced even higher. IWSR points out that latter trend is partly fueled by the growth of the number of craft spirit brands and distilleries. The number of craft spirit production facilities in the US has more than tripled since 2007 to over 1,200 and counting.

For more information on the IWSR 2016-2021 US Forecast Report, which includes wine, beer and cider, contact Brandy Rand: [email protected].