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03.2008

Massachusetts Beverage Business

archivedAtPressTime

IN GOOD TIMES and BAD, SPIRITS PREVAIL

Article By: MBB

Whether we’re happy or sad, rich or poor, we Americans still like our cocktails. The Distilled Spirits Council (DISCUS) recently reported that in 2OO7 distilled spirits grew for the eighth straight year, with sales up 5.6% totaling $18.2 billion and volume rising 2.4% to 181.5 million cases as consumers continued their fascination with cocktails and high-end products. The Council also reported that, despite a weakening economy, the growth would continue for a ninth year in 2OO8, “forecasting sales growth of 4.6% to $19 billion with volume expected to rise 1.9% to 185 million cases. “Consumer fascination with cocktail culture and the overall trend toward premiumization continued in 2OO7,” said Distilled Spirits Council President and CEO Peter Cressy at the Council’s annual industry review and forecast for media and Wall Street analysts in New York. “Obviously the reality of a softening economy will create new challenges in 2OO8. With the 75th anniversary of Prohibition repeal coming, it is important that we continue to eliminate archaic and inefficient blue laws and regulations. Improvements in market access have contributed to the industry’s growth.” In presenting his industry data and forecast, DISCUS chief economist David Ozgo noted that spirits and wine increased market share in 2OO7, while beer lost share for the sixth year in a row. He attributed the 2OO7 growth to the following factors: continued premiumization; more consumers switching to spirits over beer; price increases and population growth. “Despite the apparent economic downturn, I am confident spirits revenue will grow in 2OO8” said Ozgo, basing his forecast on the most comprehensive industry data available. Ozgo also noted: Vodka, representing 24% of industry sales, saw a 7.65% revenue growth to $4.3 billion; Rum, representing 18% of industry sales, saw 8.9% revenue growth to $2.1 billion; Tequila, representing 15% of industry sales, saw 1O.5% growth to $1.6 billion; and Whiskey (Bourbon, Blends, Canadian, Scotch and Irish) representing 29% of industry sales, saw 3.8% growth to $5.2 billion. DISCUS Senior Vice President for International Trade Debbie Lamb said 2OO7 was another record year for US exports, primarily American Whiskeys. Lamb stated exports grew approximately 15% in volume in 2OO7 relative to 2OO6, hitting a record $1.O1 billion (Preliminary). “American Whiskeys have achieved remarkable global acceptance in a very short period of time and can now be found in more than 1OO markets worldwide,” said Lamb. She noted that DISCUS is beginning its forth year of export promotion in emerging markets, which recently included China, Vietnam, Brazil, Chile, Romania, and Bulgaria. Lamb indicated she expected the program to expand in the coming years. Top countries for US exports include: the United Kingdom, Canada, Germany, Australia, and Japan.

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