Alcoholic drinks sales keep on climbing

"The minute you walked in the joint, I could tell you were a real big spender ... " (*)

In an age in which stronger DWI/DUI laws threatened to put a damper on alcoholic beverage sales, all three segments -- spirits, beer and wine -- posted domestic gains in case volume and retail sales, according to the just-released 2007 edition of the Adams Handbook Advance published by Adams Beverage Group.

"The industry is continuing to create and market products that are finding great resonance with American consumers today, and their willingness to pay more in every category proves it," Charles Forman, vice president and group publisher of Adams, said in a statement.

As I've noted over the past several years, while consumers may be purchasing less in volume in some categories, overall they're spending more money for premium labels. At cocktail lounges, patrons tend to order one or two drinks but ignore the less expensive well drinks in favor of the premium brands.

According to Adams, a leading industry analyst, the U.S. distilled spirits industry was up for the ninth consecutive year in 2006.

Total spirits consumption climbed 3.7% to 176.6 million 9-liter cases. Wine sales continued to rise for the 13th year in a row, increasing 3.4% and reaching 283.1 million 9-liter cases. And beer, the largest beverage alcohol segment, rebounded from last year's slight decline, increasing 1.3% to 2.86 billion 2.25-gallon cases.

Says the Adams report:

"High-end products, and imports in particular, across all categories continued to outperform the business as a whole. For example, in 2005 imported spirits accounted for 38.9% of consumption. By 2006, that figure reached 39.7%.

"Flavored spirits also continued to grow, reaching beyond vodka and rum and emerging in tequila, whiskey and even the cognac segments. Of the 12 segments of distilled spirits, only blended whiskies, Canadian whiskies and prepared cocktails lost volume in 2006.

"Meanwhile, vodka continued to boom, fueled by the cocktail craze, up 6.7%, with imports leading the way (up 13.9% versus 3.6% for domestics). Vodka now accounts for a stunning 27.9% of the spirits business. Rum, the second largest category, grew for the 12th straight year, up 3.5%.

"Among table wines, which account for more than 91% of U.S. wine consumption, imports and "critter" wines, those wines with fanciful packages and named for penguins, kangaroos and other animals, were the leading gainers. Imported table wines grew at a considerably faster rate last year (+5.6%) versus domestics (+3.7%). Overall imported wine -- including champagne, sparkling, dessert, fortified, vermouth and aperitif -- grew 5.6% among imports and 2.7% among domestic wines.

"On the beer front, crafts, lights and imports advanced, while premium, popular, malt liquor, ice and flavored malt beverages sagged. Total beer consumption rose 1.3% or 31.4 million cases to 2.86 billion 2.25 gallon cases. Light beers grew 2.4% and now represent 51.1% of the whole beer market.

"Retail dollar sales for the beverage alcohol market climbed last year as well, with on-premise sales up 9.2%, or $8 billion, to $93.9 billion. Off-premise sales were up 5.6% or $4.3 billion to $82.3 billion. Total sales for 2006 reached $176.2 billion in 2006."

(* - from the 1966 Broadway musical production of "Sweet Charity.")

To Dowd's Spirits Notebook latest entry.
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