White Spirits: Incl Impact of COVID-19 - US - December 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
COVID-19: Market context
EXECUTIVE SUMMARY 
Top takeaways 
Market overview 
Figure 1: Total US sales and forecast of distilled spirits, at current prices, 2015-25
Figure 2: Total US sales and forecast of distilled spirits, at current prices, 2015-25
Impact of COVID-19 on spirits
Figure 3: Short-, medium- and long-term impact of COVID-19 on spirits, November 2020
Opportunities and Challenges  
Consumers focus on the familiar when facing uncertainty
Figure 4: Alcohol purchasing behaviors during financial uncertainty among white spirit drinkers, September 2020
Spirit brands feel the loss of on-premise revenues
Figure 5: Spirit trial method, among white spirit drinkers, September 2020
Brand heritage is important but not the only quality indicator 
Figure 6: Premium spirit indicators, by spirit consumer segmentation, September 2020
Recovery 
(2022-25)
Figure 7: Important spirit attributes, by age and HHI, September 2020
Figure 8: Spirit product interest, by gender and age, September 2020
THE MARKET – KEY TAKEAWAYS 
Thriving market falls
Macro-economic conditions are detrimental to the spirits market
Better spirit choices 
Consumer social behaviors have changed
MARKET SIZE AND FORECAST
Thriving market cut down by decline of on-premise sales
Figure 9: Total US sales and forecast of distilled spirits, at current prices, 2015-2025
Figure 10: Total US sales and forecast of distilled spirits, at current prices, 2015-25
Figure 11: US unemployment rate, January 2007-November 2020
Figure 12: Consumer sentiment index, January 2007-October 2020
Figure 13: Consumer expenditure on alcohol for off- and on-premise consumption, 2005-2012
Impact of COVID-19 on spirits
Figure 14: Short-, medium and long term impact of COVID-19 on spirits, November 2020
Lockdown
Re-emergence
Recovery
COVID-19: US context
SEGMENT PERFORMANCE
Tequila steals the show, but vodka remains the cornerstone of the spirits market
Figure 15: US volume sales of white spirits, by type, 2015-23
Figure 16: US volume sales of white spirits, by type, 2015-23
Figure 17: US white spirit market share, by type, 2015-2019
MARKET FACTORS 
Economic uncertainty muddles the market
Figure 18: US unemployment rate, January 2007-November 2020
Figure 19: Consumer sentiment index, January 2007-October 2020
Researchers urge revisions to alcohol guidelines
Spirit brands lose crucial foodservice business
Figure 20: Total US on-premise alcohol sales, at current prices, 2015-25
Figure 21: Total US on-premise alcohol sales, at current prices, 2015-25
MARKET OPPORTUNITIES 
Consumers adopt new social behaviors during the pandemic
Figure 22: Activities during pandemic, September 2020
Figure 23: Activities during pandemic, virtual happy hours, by generation, September 2020
Online retailers can facilitate discovery
Growing soft power of South Korea offers new opportunities
Figure 24: Mentions of K-pop on social media channels, November 2017-September 2020
Figure 25: Mentions of soju on social media channels, November 2017-September 2020
Consumers are increasingly interested in BFY drinks
COMPANIES AND BRANDS – KEY TAKEAWAYS 
Gin and tequila grow and innovate
Vodka remains steady while rum stagnates
WHITE SPIRIT BRAND PERFORMANCE
Tito’s to become the number one vodka brand
Figure 26: volume sales of vodka, top 15 brands, on and off premise, thousand 9-liter cases, % change 2018-19
Gin is ready to take off
Figure 27: volume sales of gin, top 15 brands, on and off premise, thousand 9-liter cases, % change 2018-19
Rum is a whitespace category but struggles with its identity
Figure 28: Volume sales of rum, top 15 brands, on- and off-premise, thousand 9-liter cases, % change 2018-19
Premium tequila is a thriving category
Figure 29: volume sales of tequila, top 15 brands, on and off premise, thousand 9-liter cases, % change 2018-19
COMPETITIVE STRATEGIES
Build upon tequila’s firm foundation
Gin can provide a sense of place
Aviation opens the door for American craft gin
White spirit brands can it
Paper packaging offers sustainable benefits
Figure 30: Beverage packaging type associations, April 2020
THE CONSUMER – KEY TAKEAWAYS  
High-earning younger consumers are interested in BFY spirits
Spirit preferences vary widely by age
Consumers want to explore spirits on a budget
ALCOHOL CONSUMPTION
White spirit consumption outpaces dark spirits
Figure 31: Alcohol consumption, most vs also drink, September 2020
Older consumers cut back on white spirits
Figure 32: Alcohol consumption, by age and gender, any drink, September 2020
Figure 33: Change in white spirit consumption, by age and gender, any drink, September 2019-September 2020
ALCOHOL CONSUMPTION BY OCCASION
Spirits struggle from the loss of on-premise sales
Figure 34: Alcohol consumption by occasion, by those who drink alcohol type, September 2020
WHITE SPIRIT PURCHASES
Mezcal makes moves
Figure 35: Trended white spirit purchases, 2019-2020, September 2019; September 2020
Party is on pause 
Figure 36: Trended white spirit purchases, by age and gender, 2019-2020, September 2019; September 2020
Healthful Explorers driving spirit trends 
Figure 37: White spirit purchases, by spirit consumer segmentation, September 2020
Tequila and gin can be aspirational spirits
Figure 38: White spirit purchases, by HHI, September 2020
Mezcal can make up ground among Hispanic consumers
Figure 39: White spirit purchases, by race and ethnic origin, September 2020
BRAND TIER PURCHASES
Pandemic pushes consumers to the ends of the spectrum
Figure 40: Brand tier purchases, 2019 vs 2020, September 2020
Price is right for white spirit drinkers
Figure 41: Brand tier purchases, among white spirit drinkers, September 2020
SPIRIT FORMAT CONSUMPTION
White spirit drinkers mix it up
Figure 42: Spirit format consumption, any drink, among white spirit drinkers, September 2020
Figure 43: Spirit format consumption, any drink, by white spirit type drinkers, September 2020
Connect with the home bartender
Figure 44: Spirit format consumption, any drink, by age, September 2020
Create cocktail occasions
Figure 45: Spirit format consumption, any drink, by spirit consumer segmentation, September 2020
PREMIUM SPIRIT INDICATORS 
Awards and location resonate with white spirit drinkers
Figure 46: Premium spirit indicators, among white spirit drinkers, September 2020
Older consumers go for tradition, younger consumers check online
Figure 47: Premium spirit indicators, by age, September 2020
Heritage messages resonate with purists
Figure 48: Premium spirit indicators, by spirit consumer segmentation, September 2020
Figure 49: Premium spirit indicators, by white spirit type drinkers, September 2020
PREMIUM SPIRIT REGION ASSOCIATIONS
APAC spirits lag behind 
Figure 50: Regions associated with premium spirits, among white spirit drinkers, September 2020
Young affluent consumers think globally
Figure 51: Regions associated with premium spirits, by age and HHI, September 2020
NEW SPIRIT TRIAL
Pandemic places barriers to new brand trial
Figure 52: Spirit brand trial behaviors, among white spirit drinkers, September 2020
Figure 53: Spirit brand trial behaviors, by white spirit type drinkers, September 2020
Figure 54: Spirit trial method, among white spirit drinkers, September 2020
IMPORTANT SPIRIT ATTRIBUTES
Health claims can be a differentiator
Figure 55: Important spirit attributes, among white spirit drinkers, September 2020
Figure 56: Important spirit attributes, by age and HHI, September 2020
BFY claims appeal to trend-forward consumers
Figure 57: Important spirit attributes, by spirit consumer segmentation, September 2020
SPIRIT BEHAVIORS DURING FINANCIAL UNCERTAINTY
Consumers prioritize the familiar during uncertainty 
Figure 58: Spirit behaviors during financial uncertainty, among white spirit drinkers, September 2020
Figure 59: Alcohol purchasing behaviors during financial uncertainty, by financial situation, September 2020
Troubled times for on-premise sales
Figure 60: Alcohol purchasing behaviors during financial uncertainty, by age, September 2020
SPIRIT PRODUCT INTEREST
Think small and offer experiences 
Figure 61: Spirit product interest, among white spirit drinkers, September 2020
Young consumers will be home bartenders
Figure 62: Spirit product interest, by gender and age, September 2020
Figure 63: Spirit product interest, by age and HHI, September 2020
Make things simple for Situational Drinkers
Figure 64: Spirit product interest, by spirit consumer segmentation, September 2020
Leverage white rum consumers’ interest in cocktails
Figure 65: Spirit product interest, by white spirit type drinkers, September 2020
SPIRIT ATTITUDES
Now is the time for consumers to upgrade their home bar
Figure 66: Spirit attitudes, any agree, among white spirit drinkers, September 2020
Figure 67: Spirit attitudes, any agree, by age, September 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Forecast
Consumer survey data
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET
Figure 68: Total US sales of distilled spirits, 2015-24
Figure 69: US volume sales and forecast of white spirits, 2015-23
Figure 70: Total US volume sales of white spirits, by segment, 2018 and 2020
Figure 71: US volume sales of total distilled spirits, by channel, 2015-19
APPENDIX – SPIRIT CONSUMER SEGMENTATION
Segment definitions
Healthful Explorers
Spirit Purists
Occasional Drinkers
Situational Drinkers