The trend toward premium products is bolstering growth for the U.S. wine and spirits market. Both categories reflect continued year-over-year market value gains, with certain varietals and spirit segments contributing to the sustained growth.

A February press release from the Washington, D.C.-based Distilled Spirits Council reported it was the ninth consecutive year of record spirits sales and volumes. Supplier sales revenues were up more than 5.1 percent, rising $1.3 billion to a total of $27.5 billion, while volume rose 2.2 percent to 231 million cases, an increase of 5 million cases compared with the prior year, according to the association.

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“The spirits sector is benefiting from millennials who demand diverse and authentic experiences, and desire innovative, higher-end products,” said Chris Swonger, Distilled Spirits Council president and chief executive officer, in a statement at the time of the release.

In Beverage Industry’s April issue, Eric Schmidt, director of alcohol research at New York-based Beverage Marketing Corporation (BMC), also noted the solid performance of the spirits category. The market has continued to gain in the 2 percent range for the past three years, he said. This can be attributed to the category offering a wide array of different products that cater to many different consumer tastes, he added.

Chicago-based Information Resources Inc. (IRI) reported a 7.3 percent increase in spirit dollar sales, for the 52 weeks ending May 19 in IRI measured U.S. multi-outlets and convenience stores.

Other spirits categories like tequila and whiskey also have contributed to consecutive year-over-year growth. “Consumers have become more attuned to the nuances of whiskey and the premium tier of whiskeys have done well,” BMC’s Schmidt said. “Same thing with tequila and cognac, consumers are trading up to higher-priced segments.”

Like the spirits category, wine sales also have proliferated due to premium preferences. “Consumers are increasingly purchasing higher priced wines and other alcoholic beverages, which has contributed to revenue growth for wineries, wholesalers and retail establishments,” said Chris Lombardo, lead industry research analyst at Los Angeles-based IBISWorld, in Beverage Industry’s February issue.

However, contrary to the spirits category, growth within the wine category has been more moderate. “The rate of growth has slowed since the 4.2 percent gain in 2015, and appears to be settling in to a more moderate 1-2 percent annual growth through 2023,” explained Chicago-based Mintel in its November 2018 “Wine – US” report.

“Wine has outpaced the growth of alcohol sales in total, but has maintained a steady share of the market, while spirits gain in the wake of beer declines,” it continued.

Data from IRI also affirms moderate growth for table wines, which rose 1.8 percent, accounting for $10.5 billion in sales in total U.S. multi-outlets and convenience stores for the 52 weeks ending May 19. Champagne/sparkling wines outperformed the overall wine category as it increased 7.7 percent, reaching roughly $1.2 billion in sales within that same timeframe, IRI data suggests.

The type of wine consumers are drinking also might explain the steady year-over-year growth, noted Nathan Greene, consulting analyst at BMC, in Beverage Industry’s February issue. “Flavor is driving growth,” he said. “Prosecco and Rosé are the strongest growth varietals.”

Also worth noting, the recent emergence of canned wine is a key driver of the category, experts say. Canned wine’s growing presence in the industry is undeniable, according to IBISWorld’s Lombardo. Current estimates have annual canned wine sales around the $40 to $50 million mark, he added.

Canned wine also has brought about more opportunities for consumer consumption. Cans provide a multitude of benefits, all the while further making the category more accessible to new consumers, allowing for easy transport, BMC’s Green said.

Across the wine and spirits categories, premiumization will continue to drive growth in the coming years, experts say. BI