Revenue in the U.S. distilled spirits industry, which includes, among other spirits, whiskey, tequila, rum, and vodka, grew by 12% from 2020 to 2021, according to the Distilled Spirits Council of the United States, (DISCUS) a national trade organization representing distilled spirit marketers and producers.
Nationally, super-premium spirits saw the fastest revenue growth in the 2020-21 fiscal year, with a growth rate of 82% from the super premium and high-end product categories.
“People are drinking better, not more,” Christine LoCascio, DISCUS’ public policy chief said, adding that “premiumization is occurring across categories.”
DISCUS attributes the increased demand for premium beverages to higher-than-usual disposable income, compared to pre-pandemic levels.
Pennsylvanians’ drinking habits are reflecting that, with consumers choosing higher-end products, according to the Pennsylvania Liquor Control Board’s 2020-21 annual report.
“Sales of premium products have increased with customers spending more dollars on higher-priced products,” the report read, noting that over the same time frame, premium, super-premium and ultra-premium spirits saw a 22.41% increase, 27.16% increase, and 59.13% increase respectively.
DISCUS also reported a national increase in revenue from tequila sales.
Of the $3.8 billion in revenue growth reported by DISCUS, tequila revenue was responsible for 31% of that growth — a trend that has also been reported by Pennsylvania’s Liquor Control Board.
In the 2020-21 fiscal year, Pennsylvania saw a 52.3% increase in total dollar sales for tequila, according to the Liquor Control Board.
As the nation emerged from on-again-off-again lockdowns in 2020, LoCascio said tequila revenue “helped drive revenue growth in 2021.”
Despite the revenue growth and increased demand for premium spirits, supply chain disruptions have continued to have an impact on the industry, LoCascio said on Feb. 9, adding that in 2022, supply chain issues are “expected to improve.”
Liquor Control Board spokesperson Shawn Kelly told the Capital-Star that despite inflation concerns, the board has “not instituted price changes since before the pandemic.”
However, suppliers have made price change requests to the board, affecting retail prices, Kelly said.
Last September the board implemented a two-bottle limit on 43 different spirits, citing COVID-19 induced disruptions to the supply chain.
There are currently 37 spirits on the ration list.
Spirits with a two-bottle limit at state-run liquor stores
Kelly said that as products become more widely available again, the board will rescind the purchase limits.
Cassie Miller is an associate editor at the Pennsylvania Capital-Star, where this story first appeared.
