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American whiskey ‘still has room to grow’

The popularity of American whiskey has bolstered total US spirits sales once again, but the category “still has room to grow” before it reaches “historic levels” of consumption.

Despite boosting overall US spirits sales, the American whiskey category “still has room to grow”

According to the Distilled Spirits Council, spirits supplier sales increased 4.5% to US$25.2 billion last year, with volumes up 2.4% to 220 million cases.

2016 also marked the seventh consecutive year that spirits swiped market share from beer, the trade body said in its annual economic briefing to analysts and the media yesterday.

Volumes of American whiskey – including Bourbon, Tennessee and rye whiskey – grew 6.8% to 21m cases, as revenues increased 7.7% to US$3.1bn. The category also saw exports grow 10.2%, driving total US-made spirits exports up 6.8% despite a strong US dollar.

However, the Distilled Spirits Council stressed that American whiskey “still has room to grow” as it “trends back to historic levels of whiskey consumption”. In the early 1970s, sales of Bourbon, Tennessee whiskey, rye whiskey, Canadian whisky and other ‘blends’ hit 80m cases, figures show.

Fast-growing categories

Irish whiskey was the fastest-growing spirit in the US last year, with volumes up 18.7% to 3.8m cases and revenues up 19.8% to US$795m.

Cognac came next with a volume increase of 12.9% to 5.1m cases and revenue growth of 15.3% to US$1.5bn. Tequila also continued its upward trajectory as volumes grew 7.1% to 15.9m cases and revenues increased 7.5% to US$2.5bn.

Vodka retained its position as the best-selling spirit in the US. The category, which represents one third of all spirits volumes, increased volumes by 2.4% to 69.8m and revenues by 4.1% to US$6bn.

The Distilled Spirits Council estimates that overall retail sales of distilled spirits in the US reached nearly $78bn in 2016, supporting more than 1.4m jobs in the hospitality and manufacturing sectors.

“The continued growth of the spirits sector clearly demonstrates that adult consumers’ taste for and interest in premium distilled spirits, across all categories, is trending upward,” said Distilled Spirits Council president and CEO Kraig R. Naasz.

“Spirits makers continue to develop new innovations to appeal to a growing audience of adult millennials, and they are responding by purchasing and enjoying our products.”

Naasz also said that a recent poll showed a “significant majority” of the public support the sale of spirits in grocery stores, as well as equal taxes for spirits, beer and wine.

“Our sector is viewed favourably by the majority of the public, which also thinks we should be treated equally with respect to regulation and taxation,” he said. “From a public policy standpoint, our goal is to continue to modernise the marketplace and provide consumers with the choices and convenience they seek when it comes to spirits.”

Membership numbers at the Distilled Spirits Council surpassed 150 distillers for the first time in 2016.

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