US spirits exports to Australia up 12%

Australia has retained its position as US spirits industry's third biggest export market.

The Distilled Spirits Council has reported its 8th consecutive year of market share gains, which includes a 12% rise in exports to Australia to a value of $127.7million.

Canada remains the No.1 market with sales of $198.2million, with the UK in second place at $177.9million.

Overall, the trade association projected a new export record of $1.63 billion of US spirits sold around the globe in 2017, rising 14.3% over the prior year. Consumer tastes for premium American spirits and favorable exchange rates drove global sales, especially to markets where US spirits enjoy duty-free access. Volumes were up 5%.

“American spirits, particularly whiskeys, are the toast of the global cocktail scene,” said Council Senior Vice President for International Affairs Christine LoCascio. “International adult consumers are exploring more expensive US spirits driven by their fascination with American whiskey’s heritage, as well as its mixability and versatility in cocktails."

During an annual economic briefing earlier this week, the council revealed record spirits sales and volumes in addition to continued market share gains versus beer in 2017.

Supplier sales were up 4%, rising $1 billion to a total of $26.2 billion, while volumes rose 2.6% to 226 million cases, up 5.8 million cases from the prior year.

The council noted that the results "reflect adult consumers’ ongoing taste for higher-end distilled spirits products across most categories".

Spirits gained market share versus beer with sales rising seven-tenths of a point to 36.6% of the total beverage alcohol market.

“The spirits sector had a banner year in 2017, driven by consumer confidence in the US economy, product innovations that adult consumers want, and a fascination with premiumization across categories,” said Council President & CEO Kraig R. Naasz. “The US distilled spirits market is the second most valuable in the world, and we continue to promote consumer-friendly policies that expand responsible access to our products.”

US growth drivers: high-end and super premium spirits

Council Chief Economist David Ozgo pointed to the strongest growth in high-end premium and super premium products across most categories. The revenue for those price points increased 7.1% and 6.1%, respectively, and by 7.3% and 4.9 %for volume.

Key drivers of growth included American whiskey, up 8.1% or $252 million to $3.4 billion; tequila, up 9.9 % or $246 million to $2.7 billion; Cognac, up 13.8% or $200 million to $1.6 billion; and Irish whiskey, up 12.8% or $114.8 million to $897 million.

Ozgo also noted the growing strength of Rye whiskey, which was up 16.2% by volume to 900,000 cases, now worth $175 million to suppliers, and the emergence of other categories such as Mezcal, which has grown from less than 50,000 cases in 2009 to approximately 360,000 cases in 2017. Other noteworthy points in 2017 were the sales strength of super premium blended Scotch, up 13%; super premium gin, up 12.9%; and super premium rum, up 8.3%.

Vodka, the sector’s largest category and representing one-third of all volume, had another solid year with volumes up 2.2% and revenues up 3% to $6.2 billion, Ozgo said. Vodka sales were paced by high-end premium products with revenue growth of more than 15% to $1.6 billion.

“Adult consumers, particularly millennials, continue to gravitate toward high-end and super premium spirits products,” said Ozgo. “Companies are creating excitement in the marketplace with new products and new technologies to interact with spirits customers.”