Distilled Spirits Council of the U.S. (DISCUS) introduced a new tool to analyze sales of spirits brands at the top end of the distilled spirits market.
David Ozgo, DISCUS senior vp-economic and strategic analysis, said the Luxury Brand Index tracks sales of brands in six major spirits categories that sold for a retail price of $50 or more for a 750 ml bottle. Price points for this segment of the market are more than three times that of the typical bottle and account for only 3-4 percent of total spirits volume. This represents about 105 million bottles sold, totaling more than $10 billion at retail.
“Across all major spirits categories, consumers are captivated by the quality, exclusivity and heritage of luxury brands,” Ozgo said. “The sale of luxury spirits brands has spiked 125% between 2015 and 2020, and demand for these prestige products is growing.”
The LBI includes sales of Cognac, American whiskey, Irish whiskey, Single Malt Scotch, Japanese whisky and Tequila from the past five years.
Key LBI Findings:
- Luxury spirits brands have grown in volume by 125% between 2015 and 2020, an annual growth rate of 17.7 percent; far greater than the 2.5% rate seen across all spirits brands.
- Continuing the upward trend, through the first half of 2021, volumes of luxury spirits brands are up nearly 25%.
- Luxury whiskeys have grown more slowly than the other categories but still outpace the growth of the total spirits sector with an annual growth rate of 11.1 percent.
- Category Highlights:
American Whiskey:
America’s native spirits have been enjoying a resurgence over the past decade, and new luxury segments of the American whiskey category have emerged. These include Bourbon, Tennessee whiskey, Rye and American single malts. Since 2015, the luxury American whiskey category has grown at an annual rate of 41 percent. Now totaling approximately 6 million bottles.
Japanese Whisky:
Americans renewed fondness for whiskey has helped Japanese whisky gain a strong foothold in the U.S. market in recent years. Many Japanese whiskies are luxury priced, and the segment grew at an annual rate of 42 percent between 2015 and 2020. Now totaling nearly 2 million bottles.
Tequila:
It has only been within the last 10 years that Americans have developed an appreciation for 100 percent blue agave tequilas. Since 2015, this new luxury category has enjoyed an annual growth rate of 30.7 percent. Now totaling nearly 28 million bottles.
Cognac:
Cognac is one of the traditional luxury spirits. While well established for decades, luxury priced Cognacs grew at an annual rate of almost 16 percent since 2015. Now totaling nearly 29 million bottles.
Irish Whiskey:
Irish whiskey has enjoyed rapid growth in the U.S. climbing at a rate of more than 14 percent annually since 2015. Now totaling more than 1 million bottles.
Single Malt Scotch:
Single malt scotch, with its long and rich history, has many luxury priced brands. In recent years, currency fluctuations and tariffs have presented challenges, but through the first six months of 2021, the luxury segment has returned to strong volume growth of 5.6 percent. Now totaling nearly 9 million bottles.
The LBI will be released quarterly to provide insight to the beverage business community, analysts and media. Retail prices were calculated by IRI Worldwide using retail scanner data. Volumes were derived from the Distilled Spirits Council’s proprietary brand data.