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US Alcoholic Beverage Market – Overview

The volume of the U.S. beverage market totals at 202 billion liters of liquid. Alcohol is responsible for 16.5% of total beverage volume. The alcoholic beverage market is over 80% attributed to malt beverages with wine and spirits products splitting the remaining 20%. Distilled spirits make up around 7% of the sales of alcoholic beverages. The largest sub-category of spirits is vodka with 34% of cases sold, followed by whiskey with 24% and miscellaneous specialty spirits at 12%. Wines make up around 11% of the alcoholic beverage market. 71% of the cases sold are domestically produced wines and 19% are imported wines. Champagnes and sparkling wines make up around 7% of the wine volume.

US Market Universe of Wine and Spirits

US Market Universe of Wines & Spirits

Industry has been growing with revenue outpacing volume on the spirits side

The wine and spirits industry has experienced steady growth over the last ten years. The spirits segment volume has been growing at a CAGR of 1.8% over the last 10 years while revenues outpace this growth with a CAGR of 3.3%. The wine segment has been growing steadily at a CAGR of 3.4% over the last ten years in volume and a CAGR of 2.2% in revenues.

CAGR charts combined

 

Open States are approximately 80% of the wine and 75% for spirits, the remainder are sold into control/monopoly states. The largest markets are California, Florida and New York.

Volume of Spirits & Wine in Open States & Control-Monopoly States

 

 

Revenue share change of large and small brands in selected food categories 2009-2013 in %

Smaller brands taking share of larger brands is a phenomenon across many FMCG (fast moving consumer goods) categories. Factors often cited as reasons include: shortening life cycles of brands in general, entrepreneurial innovation wave, liberalization and de-concentration of marketing avenues (e.g., Internet), premiumization, desire of consumers to differentiate themselves.

Revenue share change of large and small brands in selected food categories

 

Market is getting more fragmented- smaller brands have been gaining share

Smaller brands have been gaining share. The non-top 5 brands gained up to 12 percentage points over a 20 year period and up to 6 percentage points in the last 5 years.

Market share of non-top 5 spirits brands over 20 year period in selected spirits categories

 

Premium sector increasing exponentially

From 2015 to 2016, premium brands grew more than twice as much as non-premium brands in almost every category. Overall growth for premium products was 9%. Five year projections reflect estimated market share growth for premium products to reach 23.6% compared to 2.9% for non-premium.

Growth is Expected at Premium Price Points

Source: Beverage Information Group, IWSR, Park Street Analyses; Non-Premium = “Standard” and “Value”, Premium = “Premium,” “Super Premium,” and “Ultra Premium”

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