Consumers Favor Cheaper Liquor

Consumers Favor Cheaper Liquor

U.S. consumers consumed a slightly higher quantity of liquor in 2009 as compared to 2008, but traded down on quality, according to the Distilled Spirits Council.

Liquor sales by volume grew 1.4% between 2008 and 2009, but liquor revenues remained flat at $18.7 billion in 2009. Despite this leveling off, liquor revenues grew 66% between 2000, when they totaled $11.7 billion, and 2009. Average yearly volume growth was 5.2% in that period.

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Value Drives Volume

When 2009 liquor sales volume is broken down by price category, the growing dominance of value-priced brands becomes clear. In 2009, U.S. consumers purchased 75.9 million value-priced nine-liter cases of liquor, 40.6% of 186.9 million total cases purchased.

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Premium liquor was the second-most-popular price category in 2009, accounting for 36.4% of total volume with 68.1 million cases purchased. Consumers also purchased 30.8 million cases of high-end liquor (16.5%) and 12.1 million cases of super-premium liquor (6.5%).

Premium Drives Revenue

Although fewer cases of premium liquor were sold in 2009 than value liquor, its higher price point made premium more of a revenue driver. Premium liquor sales amounted to $6.8 billion in 2009, 36.4% of $18.7 billion total sales. High end sales were $5 billion, accounting for another 26.7% of revenue. Value sales totaled $4.1 billion, representing 21.9% of revenue. Super-premium liquor sales of $2.8 billion equaled 15% of revenue.

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Value Sales Spike

Value was the only liquor price segment to experience significant sales volume growth in 2009. While value sales volume grew 5.5% in 2009, compared to 0.6% in 2008, premium sales volume only increased 0.6%, down from 3.7% in 2008. High end liquor sales volume dropped 3.5%, compared to a 0.6% decline in 2008, and super-premium liquor sales volume declined 5.7%, compared to a 1.7% gain in 2008.

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Consumers Like Private Label Alcohol

Alcohol is one of the highest-volume categories of private label CPG goods in the U.S., according to research firm The Nielsen Company. As reported by Retailer Daily, alcoholic private label beverage unit sales rose 13.3% in December 2009, from 8.38 million units to 9.45 million units. This made alcoholic beverages the number three private label CPG item by unit sales volume for the month, following a number two ranking in November 2009.