Blog Entries Tagged as DISCUS

Distilling the Meaning

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Category: General Blogs  |  Tags: DISCUS

 

We’re focusing a great deal on craft beer this issue (major congrats to Oskar Blues for earning our inaugural Craft Brewer of the Year Award), so it’d probably be appropriate for me to write about craft beer. But, I’ve written a lot of about the subject lately (including in this issue) and I think I want to talk about spirits. 
 
There were a great many statistical nuggets I took away from the Distilled Spirits Council’s (DISCUS) annual media and analysts briefing last month. For one, total spirits volume grew by 3.0 percent in 2012—an impressive number for any mature beverage category, especially when compared with the likes of U.S. beer and carbonated soft drinks. Volume reached 202 million case equivalents. Total revenue was up an even greater 4.5 percent, rising to $21.3 billion
 
A good deal of overall spirits growth is thanks to the premiumization trend, as a sizeable portion of the category’s growth came from the top two spirits price segments, high-end and super-premium, which grew by 4.8 percent and 8.9 percent, respectively. The two segments on the lower half of the price spectrum, value (the lowest) and premium, grew by a much more modest 1.8 percent and 2.1 percent, respectively. Additionally, the super-premium segment is having a much greater impact than it had 10 years ago. In 2003 the value segment’s total revenue was just under $3.8 billion, while super-premium’s tally was a tad lower than $1.5 billion. Ten years later, value’s annual revenue was only a slightly higher $4.1 billion, but super-premium is getting pretty close to matching it at $3.9 billion.
 
There were plenty more facts and figures DISCUS president and CEO Peter Cressy and chief economist David Ozgo presented at the meeting, but I wasn’t struck so much by what was said, but by what wasn’t said—or at least wasn’t said until the final minutes of the presentation. In the same event held in in each of the past few years, the speakers wouldn’t get five minutes into their presentations without uttering the word “recession” or even “economy” (not including Ozgo’s economist title). But this year I was already packing up my laptop (reporters notebooks are for suckers) before a passing reference to the state of the economy was made late in the session. 
 
And I don’t think that was an accident. When your numbers are as good as spirits’ have been—not to mention steady, as 2011 was similarly positive for the category—it’s perfectly safe to get a sense that things have returned to some form of normal. And when the top-shelf price segments are doing as well as they are, it points to a sustainable trading-up trend that, after a brief recessionary hiccup, is back in full-swing. The gravitation back toward affordable luxury over the past three years is a sign that times could actually be heading back into the “good.” 
 
This in no way is meant to cavalierly dismiss the 7.9 percent unemployment elephant in the room. There’s still a considerable way to go until we collectively reach full recovery. But with some consistently solid numbers coming out of the spirits market, it’s okay to surrender to one’s inner optimist.