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Wine & Spirits

2014 State of the Industry: Wine and spirits

Whiskey, wine blends grow double digits

Fireball bottle and KJAV Red Blend
top spirits chart
top table wines chart
Fireball bottle and KJAV Red Blend
top spirits chart
top table wines chart
July 11, 2014

Within the wine and spirits categories, dark spirits and blended wines are leading growth, according to analysts. The whiskey category, for instance, increased 12.8 percent in dollar sales and 10.6 percent in volume sales in U.S. multi-outlets during the 52 weeks ending April 20, compared with the prior-year period, according to Information Resources Inc. (IRI), Chicago.

The Irish whiskey segment, in part-icular, led whiskey’s growth last year, analysts told Beverage Industry in its April issue. Bourbon also was a significant driver of growth, growing 6.8 percent in volume in 2013, added David Ozgo, chief economist for the Distilled Spirits Council of the United States (DISCUS), Washington, D.C.

By comparison, all dark spirits increased approximately 3 percent in volume in 2013 compared with 2012, noted Jennifer Zegler, global food and drink analyst for Mintel, Chicago. Furthermore, the overall spirits category — including spirit-based ready-to-drink (RTD) cocktails — grew 2 percent in terms of volume last year, according to Edward Hsyeh, U.S. research analyst for Chicago-based Euromonitor International, Chicago.

In terms of dollar sales, the whiskey segment edged out vodka, reaching $1.69 billion in the 52 weeks ending April 20 in IRI-tracked channels. However, vodka trailed closely behind with nearly $1.66 billion in sales during the timeframe, IRI reports. Nevertheless, vodka has retained its top spot as the best-selling spirit by volume, selling nearly 14.7 million 9-liter cases in the 52 weeks ending April 20 in IRI-tracked channels. By comparison, whiskey sold almost 10.4 million cases during the timeframe, according to IRI data.

Despite the intra-category competition, one trend is being shared between the two segments: flavors. According to Mintel’s custom consumer research, 35 percent of vodka drinkers choose flavored vodka, and approximately one-quarter of whiskey drinkers look for flavored whiskeys. Simple flavors, such as citrus, cherry, coffee, peach and chocolate, are most popular for vodka, DISCUS’ Ozgo noted in the Beverage Industry article. Confectionery-flavored vodkas also continue to perform well, according to Euromonitor’s Hsyeh. However, in terms of growth, these confectionery flavors have peaked, he said.

Within the whiskey segment, flavors like cinnamon, apple and cherry have shown to be popular, Hsyeh said in the article. For instance, Fireball Cinnamon Whisky, a brand of Metairie, La.-based Sazerac Co. Inc., grew 235 percent in volume in the 52 weeks ending May 18 in IRI-tracked channels, compared with the prior-year period.

Within the wine category, blended wines experienced double-digit growth last year, according to Nielsen data provided in Beverage Industry’s March issue. The segment increased 16.8 percent in dollar sales and 12.6 percent in volume sales for the 52 weeks ending Jan. 4 in U.S. retail outlets, according to Nielsen data. Further demonstrating its growth, wine blends have surpassed Moscato wines as the fastest-growing varietal within the category in terms of dollar sales, said Danny Brager, senior vice president of New York-based Nielsen’s beverage alcohol practice. Dollar sales of Moscato wines increased 12.2 percent for the 52 weeks ending Jan. 4 in off-premise channels, according to Nielsen.

Sparkling varietals including Prosecco from Italy and Cava from Spain also are receiving more attention, experts noted. For instance, dollar share for Prosecco grew 28 percent in 2013 compared with the prior year, Nielsen’s Brager said. Rosé, Moscato and Cava sparkling wines also grew dollar share approximately 4 percent last year, which is faster than Champagne’s growth of almost 2 percent, Nielsen reported.

 Despite the fast growth of these segments, Chardonnay and Cabernet Sauvignon still account for the lion’s share of the category, Nielsen’s Brager noted in the article.  

KEYWORDS: bourbon flavored vodka red wine sparkling wine Whiskey wine blends

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