US on-premise spirits sales favour premiumisation

New data shows on-premise spirits sales have fallen in the past year, with value brands most affected.

CGA by NIQ has released its latest On Premise Measurement (OPM) Impact Report, which found that in 2023, on-premise spirits sales in the US dropped by 3.3% in value and 6.5% in volume. 

The research showed value spirits took the hardest hit, dropping by 12.3%, while mid-range options decreased by 8.5% compared to the previous year. Premium and super-premium sales meanwhile showed more resiliency, as they were only down 3.6% and 5% respectively. Spirits in the ultra-premium category lost 1.5% of volume year on year.

“The spirits category in the US on-premise continues to polarise, with some consumers spending freely while others restrict their visits out,” Matthew Crompton, CGA by NIQ’s regional director, North America, said.

“We’re seeing the greatest resilience at the premium end of the market, and with so many drinkers willing to trade up we can expect premiumisation to remain relevant, benefitting the ultra-priced segment in 2024.”

According to the OPM report, the best-selling spirit price segment in 2023 was ultra-priced Tequila, which grew by 2.5% in terms of sales value and 10.6% in distribution points.

The report also monitors state-specific growth, with sales in New York and Illinois increasing by 1% and 2.3% respectively. In California and Texas, meanwhile, sales dropped by 4.7% and 4.4% respectively. 

 “Lower-price tiers are more challenging, but there is still growth potential for suppliers that can understand consumers’ need for value and position their value brands correctly,” Crompton said.

“Identifying and responding to the subtle but significant differences in people’s preferences is going to be key to protecting sales and share, and the CGA by NIQ team are ready to help all businesses stay ahead of the curve.”