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US spirits sales fall 3.5% as inflation bites

Spirits sales in the US dropped by 3.5% in the year to September 2023 as inflation continued to hit consumer spending habits.

Price inflation is slowing the growth of higher-priced agave spirits

Data from the Wine & Spirits Wholesalers of America’s (WSWA) SipSource tool covers wine and spirits distributor sales for hundreds of thousands of on-trade and off-trade accounts in the US.

Current 12-month rolling data for October 2022 to September 2023 showed a volume decline for both spirits and wine, the latter of which was down by 7.4%.

Year-to-date data (January 2023-September 2023) showed drops of 5.1% for spirits and 8.4% for wine.

Excluding the fast-growing pre-mixed cocktails segment, spirits struggled even more with a decline of 5.2% (October 2022 to September 2023) and year-to-date volume dropping by 6.7%.

The biggest growth areas for spirits in the past 12 months were pre-mixed cocktails (up by 8.6%) and agave-based spirits (up by 2.8%).

However, SipSource noted that the growth of agave-based spirits has reversed in the last year, with products priced over US$50 down by 2.7%, while those under US$10 rose by 5.9%.

SipSource analysts said price inflation is impacting consumers’ spending habits and premiumisation across all spirits segments.

Currently, spirits priced US$25 and above are outselling those under US$25 by only 90 percentage points compared with last year at this time, when the gap was much bigger at 500 percentage points.

The on-trade is also driving growth for spirits as the channel where consumers consistently choose the category as their main drink.

In the on-trade, spirits are growing at a rate of 4.4%, however numbers have not returned to pre-pandemic levels. Wine is down by 2.2% in the channel.

SipSource expects to see improvement for wine and spirits in the future. Comparable trends from the last three months of 2022 are slightly healthier, with spirits up by 0.7% and a decline of 5.5% for wine.

Spirits sales in the US fell by 4.2% during the first six months of 2023, SipSource data revealed.

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