Alcohol Spending Hit $241.8 Billion in 2017

Source: Wine & Spirits Daily
JANUARY 11, 2018

The numbers are starting to come in for 2017, and thus far, beverage alcohol trends seem to have been lukewarm, depending on who you ask.

Consumer spending on alcohol was up 2.7% to $241.8 billion for the year, according to research from BW166 and Gomberg, Fredrikson & Associates. Although, total alcohol volumes were down 0.4%, wine volumes grew 1.3% and value was up 3%. It’s worth noting those increases were a bit softer than 2016’s 5.8% and 2.6% growth in volume and value.

Jon Moramarco, founder of BW166, noted in a presentation this afternoon that “it is important to understand that consumers continued to increase the servings of Beverage Alcohol that they enjoyed.”

WINE VOLUME BREAKDOWN. Shipments into the US market were up 1.2% for still wines and 8.6% for sparkling in 2017. Wine from California was up 2.1%, packaged imports were up 3.2%, but wine from the other 49 states was down 10.3% for the year.

French rose, along with French and Italian sparkling wine, were the top drivers of growth in US packaged imports. French rose volumes were up 43% in 2017, with other rose volumes up 33.2%. Italian sparkling imports grew volumes by 11.2% and French sparkling imports were up nearly 15%.

Moving to US exports, Jon said thanks to the impending Brexit we’re seeing a lot of declines in the UK. As a result, packaged wine exports were down 15% in volumes and down nearly 10% in value. Minus UK numbers, packaged US exports were down 2.4% in volume and up 2% in value.

ALTERNATIVE PACKAGING. Premium boxed wines have become a significant piece of business for the wine industry, according to Jon. Premium boxed wines represented 3.5% of category dollar share and 5.7% of volume share in 2017. The top five box brands account for nearly 95% of the boxed wine share.

187 ml four packs is the next largest alternative packaging category, representing 1.6% of dollar share and 1.9% of volume share in 2017. Tetra Packs are a bit smaller with just under 1% share of both value and volume. Cans were up a whopping 35% in value in 2017, but is still a much smaller category than other alternative packaging, with just 0.2% dollar and volume share.

WINE & WEED. Touching on the impact of marijuana legalization, Jon said that if the Colorado market is any indication, cannabis is “probably not going to be a big impact on wine consumption or beverage alcohol consumption.” In fact, in 2017 Colorado consumers were drinking across all three alcohol categories 20% more on average, per the Colorado Dept. of Revenue. That is in line with or even more than previous years before recreational cannabis was legal. Though Jon noted that while the volumetric impact does appear to be significant, there’s no indication of the impact on value.

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