Fine Wines/Champagne and Spirits in the US

PROSPECTS

Premiumisation drives new consumption trends

Premiumisation continued to be a key driver of growth in fine wines/champagne and spirits in 2018. It has increasingly been recognised that consumers are likely to try a more premium, high-priced alcoholic drink over a cheap one for a variety of reasons; mainly expected quality and experience.

Luxury vodka consumption fluctuates

Whilst luxury vodka has historically led in value and volume sales of fine wines/champagne and spirits, its consumption fluctuated annually for the last five years. Even though vodka is the most consumed spirit across all price segments in value and volume terms in the US, premium vodka failed to maintain annual growth in recent years.

Luxury brandy and cognac sees the fastest growth

Luxury brandy and cognac saw the fastest current value growth in fine wines/champagne and spirits in 2018. Whilst cognac suffered in terms of volume consumption during the Great Recession a decade ago, its consumption recovered, following the recovery of the US economy over the last decade.

COMPETITIVE LANDSCAPE

Bacardi acquires the leading super premium tequila brand, Patron

The world's largest private spirits business, Bacardi, has completed its purchase of the rest of the leading super premium tequila brand Patron. Having already owned 30% of Patron from a 2008 purchase, Bacardi's full acquisition coincides with the industry trend of consolidation in tequila.

Bacardi USA takes the lead from Diageo North America

Diageo North America lost its position as the leader of fine wines/champagne and spirits in the US in value terms in 2017, to Bacardi USA. This shift in positions was due to Bacardi USA’s acquisition of Patron, the leading super premium tequila brand.

Online retailing of fine wines/champagne and spirits continues to grow

Internet retailing continues to grow in terms of the distribution of fine wines/champagne and spirits in the US, despite its relatively low value sales in comparison with grocery retailers. Whilst e-commerce is seemingly an unconventional way to obtain premium alcohol, the growth in online consumption is parallel to the overall growth in e-commerce.

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