Drinkers Continue To Spend As Sales Of Luxury Booze Grows 23%. But Is It The Category Recession Proof?

Food & Drink Drinkers Continue To Spend As Sales Of Luxury Booze Grows 23%. But Is It The Category Recession Proof? Kate Dingwall Contributor Opinions expressed by Forbes Contributors are their own. I write about people, places, and products in the spirits world.

Following New! Follow this author to stay notified about their latest stories. Got it! Oct 20, 2022, 10:42am EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin Strong consumer demand for luxury spirit continues to drive spirits sales, but numbers are slumping . .

. [+] and experts predict continued softening. (Photo by Jeff J Mitchell/Getty Images) Getty Images Bourbon is booming and the tequila category is selling high-end, sippable bottles faster than ever before.

As drinkers continue to get spendy on their spirits shopping, sales of luxury brands grew 23% in the second quarter of 2022. In the last year, data from Distilled Spirits Council of the US (DISCUS) showed that sales of luxury spirits grew 43%, led largely by tequila and American whiskey. But in the face of an incoming recession, where does that leave the premium spirits sector? Despite the highest inflation in decades and the threat of continued negative economic growth, DISCUS notes that sales of luxury spirits brands continue to thrive.

“We continued to see strong consumer demand for luxury spirits brands through the second quarter of 2022 despite the current economic environment,” said DISCUS Chief of Public Policy Christine LoCascio. She notes that the spirits sector has always been resilient in tough economic conditions. On the other hand, a recent report by Rabobank predicts that demand for super-premium brands will “soften notably” in the fourth quarter of 2022 and “turn noticeably negative” in 2023.

It also points out that during 2009’s recession, super-premium segments fell a noticeable amount. But let’s look at the numbers. In the last quarter, tequila showed the largest increase, posting 43% annual growth.

American whiskey rose 30%. Both categories have been leading the shift towards premiumization — tequila saw the biggest gains (75% annual growth rate) in the US market followed by American Whiskey and Cognac at 46% and 31%. Tequila sales in North America have been steadily increasing from 2002 until 2016, when sales reached a record high of $22.

3 billion. MORE FOR YOU Livestream Shopping Stays Hot As Whatnot Valuation More Than Doubles To $3. 7 Billion The Reality Of Increased IRS Funding In Our Flawed Healthcare System, Patients Need To Take More Control Beyond this quarter, according to DISCUS, both tequila and American whiskey have been on the uptrend over the last five years, growing 45% over the period.

Scotch is growing faster than last year, with a 13% annual growth rate compared to last year’s 10%. LoCascio notes, “It appears macroeconomic headwinds slowed the astonishing growth rate of luxury spirits sales of 2021 but were not strong enough to reverse the positive premiumization trend. ” This information comes from a recent quarter analysis by DISCUS’ Luxury Brand Index, a tool recently created to analyze sales of premium and ultra-premium spirits (over $50).

But while individual categories are growing, the overarching premium trend is slowing. Second quarter growth increased by 21%, according to DISCUS, down from 50% year-over-year growth in the 2021 to 2021 period. Does this reflect a change in tides? It may depend on the product.

Some categories of luxury spirits didn’t have the same staying power. Japanese whisky fell flat, while Irish whiskey slumped, growing just 7% this quarter compared to 24% in last year’s second quarter. The Rabobank report states that “we believe the overall growth story of the super-premium segment remains intact, and any declines we may see in the coming year should also be viewed in the context of the exceptional year of growth in 2021.

” “Distilled spirits are affordable luxuries that bring spirits consumers great joy,” says LoCascio. “Consumers are willing to spend extra for that special spirit and choosing to drink better, not more. ” Follow me on Twitter or LinkedIn .

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