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Dark Spirits - US - November 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Overview
The issues
Spirits and cocktails come second to beer and wine
Figure 1: Alcohol consumption, most often and also drink, August 2017
Lack of female drinkers hinders total market growth
Figure 2: Dark spirit consumption, by gender, August 2017
Seasonality shifts limit year-round consumption
Figure 3: Seasonality of spirits, August 2017
The opportunities
Tap into female drinkers through cocktails
Figure 4: Attitudes toward spirits, by gender, August 2017
Increased occasion association
Figure 5: Spirit decision making, August 2017
Dark/spiced rum to grow in quality appeal
Figure 6: Spirit associations, August 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Premium and craft offerings drive strong dark spirit growth
Off-premise dominates consumption, on-premise sees growth
Dark spirits aren’t first to mind
Consumers are drinking less as the US population ages
MARKET SIZE AND FORECAST 
Dollar sales of spirits continue strong growth
Figure 7: Total US sales and fan chart forecast of distilled spirits, at current prices, 2012-22
Figure 8: Total US sales and forecast of distilled spirits, at current prices, 2012-22
Figure 9: Total US sales and forecast of distilled spirits, at inflation-adjusted prices, 2012-22
Dark spirits volume growth expected to be strong through 2022
Figure 10: US volume sales of dark spirits, 2012-22
Figure 11: US volume sales of dark spirits, by segment 2012-22
MARKET BREAKDOWN
Consumers interested in all things dark spirits
Figure 12: US volume sales of dark spirits, by segment 2012-22
Irish/imported whiskey, straight whiskies take off
Figure 13: US volume sales of whiskey/whisky, by type, percentage change 2012-17
Brandy’s premium appeal resonates with consumers
Figure 14: US volume sales of brandy, cognac, and Armagnac, percentage change 2012-17
Off-premise dominates in spirits…
Figure 15: US volume sales of dark and white distilled spirits, market share by channel, 2012-16
…on-premise consumption looking up
Figure 16: US volume sales of dark and white distilled spirits, percentage change by channel, 2012-16
MARKET PERSPECTIVE
NFL befriends liquor advertisers
Figure 17: “Hydrate Generously | Drink in Moderation | Crown Royal Water B.O.Y.S.” September 2017
White spirits continue to grow
Figure 18: US volume sales and forecast of white spirits, by segment, 2011-21
Beer and wine are staples
Figure 19: Alcohol consumption, most often and also drink, August 2017
Cocktails with white spirits are the standard
Figure 20: Products used – Alcohol, June 2017
MARKET FACTORS 
Consumers are drinking less, but spending more on-premise
Figure 21: Total on-premise market volume consumption per capita, total alcohol, 2011-20
Younger adults limiting dark spirit intake
Figure 22: Shifts in consumption of dark spirits, by age, August 2017
The US gets older
Figure 23: Median age of the population, 1940-2050
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Dark spirit brands thrive across the board
Premium and craft offerings elevate the category
US-bottled international types lose their way
Flavors and brand stories appeal to whiskey consumers of all genders
COMPANY AND BRAND SALES OF DARK SPIRITS
Jack Daniel’s and Jim Beam bourbons lead the pack
Figure 24: Bourbon, blended, rye whiskies consumed in the past 30 days, top five, by brand, trended 2012-17
Jameson drives growth in Irish whiskey
Figure 25: Canadian, Irish whiskey, Scotch whisky consumed in the past 30 days, by brand, trended 2012-17
Premium brandy and cognacs thrive with focus on Millennials
Figure 26: Brandy/cognac consumed in the past 30 days, by brand, trended 2012-17
Dark rum brands remain relatively stable
Figure 27: Dark/spiced/gold rum consumed in the past 30 days, by brand, trended 2012-17
WHAT’S WORKING?
Craft-style dark spirits
Premium offerings
Figure 28: Jim Beam Black | World’s Highest Rated Bourbon | Mila Kunis Voiceover, July 2017
Irish whiskey continues its boom, led by Jameson
WHAT’S STRUGGLING?
US-bottled international whiskies struggling to ring authentic
WHAT’S NEXT?
Blends and flavors
Brand stories
Figure 29: Tullamore D.E.W. “No Irish Need Apply (Extended Version),” October 2017
The inclusive whiskey drinker
THE CONSUMER – WHAT YOU NEED TO KNOW 
Men lead the dark spirit category with whiskey consumption
Consumers report stalling or decreased drinking habits compared to last year
Relaxation is the goal
Cocktails inspire spirit exploration, type of spirit says more than brand
Why consumers are drinking determines what spirit consumers are drinking
Spirit consumption shifts with the seasons
Dark spirits highly associated with quality
Liquor stores drive spirit purchases
DARK SPIRIT CONSUMPTION 
Whiskies lead dark spirit consumption
Figure 30: Dark spirit consumption, August 2017
Men lead dark spirit consumption
Figure 31: Dark spirit consumption, by gender, August 2017
Dark spirit consumption peaks at an early age
Figure 32: Dark spirit consumption, by age, August 2017
Black consumers imbibe brandy
Figure 33: Dark spirit consumption, by race, August 2017
SHIFTS IN DARK SPIRIT CONSUMPTION
Majority of consumers are stalling consumption or drinking less
Figure 34: Shifts in consumption of dark spirits, August 2017
Young women limit consumption
Figure 35: Shifts in consumption of dark spirits, by age and gender, August 2017
Cutting back on drinking alcohol hurting dark spirits
Figure 36: Shifts in consumption of dark spirits – Reasons for drinking less, August 2017
MOTIVATIONS FOR DRINKING ALCOHOL
Relaxation and taste preference drive alcohol consumption
Figure 37: Motivations for drinking alcohol, August 2017
Relaxation is the goal, rum drinkers want to have fun
Figure 38: Motivations for drinking alcohol, by dark spirit consumption, August 2017
Younger consumers drink to explore
Figure 39: Motivations for drinking alcohol, by age, August 2017
Parents also want to have fun
Figure 40: Motivations for drinking alcohol, by parental status, August 2017
Taste becomes a driving motivator if budget allows
Figure 41: Motivations for drinking alcohol, by household income, August 2017
ATTITUDES TOWARD SPIRITS
Cocktails encourage trial of new spirits
Figure 42: Attitudes toward spirits, August 2017
Men feel more knowledgeable about spirits
Figure 43: Attitudes toward spirits, by gender, August 2017
Younger men express identity through type and brand of spirit they drink
Figure 44: Attitudes toward spirits, by age and gender, August 2017
Hispanics eager to make cocktails at home
Figure 45: Attitudes toward spirits, by Hispanic origin, August 2017
DECIDING WHICH SPIRIT TO DRINK
Why they’re drinking determines what they’re drinking
Figure 46: Spirit decision making, August 2017
On-hand ingredients sway decision for dark spirit drinkers
Figure 47: Spirit decision making, dark spirit drinkers, August 2017
Younger consumers open to persuasion from many sources
Figure 48: Spirit decision making, any rank, by age, August 2017
Older Millennials less swayed by occasion, open to social media inspiration
Figure 49: Spirit decision making, by Younger and Older Millennials, August 2017
SEASONALITY OF SPIRITS
Dark spirits peak in colder times of the year
Figure 50: Seasonality of spirits, August 2017
Flavored whiskey, rum good opportunities for year-round consumption
Figure 51: Seasonality of spirits, August 2017
DARK SPIRIT ASSOCIATIONS
Whiskies, brandy promote quality, dark rum appeals to taste and fun
Figure 52: Spirit associations, August 2017
Women don’t think whiskey/whisky is for them
Figure 53: Spirit associations, whiskey/whisky, by gender, August 2017
Black and Hispanic consumers are strong target for brandy
Figure 54: Spirit associations, brandy, by race and Hispanic origin, August 2017
Young men associate rum with fun
Figure 55: Spirit associations, dark/spiced rum, by age and gender, August 2017
PURCHASE LOCATION OF SPIRITS
Regardless of spirit value, consumers buy at liquor
Figure 56: Purchase location, August 2017
Figure 57: Purchase location – Do not purchase, August 2017
Western consumers purchase spirits in club stores, local supermarkets
Figure 58: Purchase location, by region, August 2017
Older Millennials purchase value spirits wherever they shop
Figure 59: Purchase location, value spirits, by Older and Younger Millennials, August 2017
Hispanic consumers purchase spirits in a wider range of channels
Figure 60: Purchase location, by Hispanic origin, August 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET 
Figure 61: Total US sales and forecast of distilled spirits, at current prices, 2012-22
Figure 62: Total US sales and forecast of distilled spirits, at inflation-adjusted prices, 2012-22
Figure 63: US volume sales of dark spirits, 2012-22
Figure 64: US volume sales of dark spirits, by segment 2012-22
Figure 65: US volume sales of whiskey/whisky, by type, 2012-17
Figure 66: US volume sales of dark and white distilled spirits, market share by channel, 2012-16
Figure 67: US volume sales of dark and white distilled spirits, percentage change by channel, 2012-16

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