White Spirits - US - December 2019

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Top takeaways
The issues
The alcohol industry will need to adapt to Gen Z
Figure 1: Spirit behaviors, by generation, September 2019
Flagship vodka and rum brands underperform
Figure 2: Change in select vodka brands, in thousand 9-liter cases, change 2017-18
Figure 3: Change in select rum brands, in thousand 9-liter cases, change 2017-18
Decline in value brands emblematic of the entire alcohol market
Figure 4: Percent change in volume sales (9-liter cases sold), 2013-18
The opportunities
Cheers to tequila
Figure 5: Total US volume sales and forecast of tequila, 2014-22
Boomers can upgrade their spirit purchases
Figure 6: At-home cocktail attitudes and spirit attitudes, by generation, September 2019
Millennials eager to try new spirits, even booze-less spirits
Figure 7: Product interest, September 2019
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Spirits outperform other alcohol types
New challengers threaten spirits
Alcohol abstention and moderation grows
MARKET SIZE AND FORECAST
Spirits market enjoys continued growth
Figure 8: Total US sales and fan chart forecast of distilled spirits, at current prices, 2014-24
Figure 9: Total US sales and fan chart forecast of distilled spirits, at current prices, 2014-24
MARKET BREAKDOWN
Tequila is a star spirit
Figure 10: Total US volume sales and forecast of white spirits, by segment, 2014-22
Figure 11: Total US volume sales and forecast of white spirits, by segment, 2014-22
Figure 12: Percent change in 9-liter cases sold, 2013-18
Gains in on-premise spirit sales
Figure 13: US volume sales of total distilled spirits, by channel, 2014-18
Figure 14: US volume sales of total distilled spirits, by channel, 2014-18
MARKET PERSPECTIVE
Hard seltzers upend the alcohol market
Figure 15: White Claw Pure Hard Seltzer
Dark spirits outpace white
Figure 16: Total US volume sales and forecast of dark spirits, by segment, 2014-22
Figure 17: US volume sales of whiskey/whisky, by type, 2014-19
Haze lingers over the cannabis market
Figure 18: Attitudes/behaviors, October 2019
Figure 19: Reasons for using cannabis, October 2019
MARKET FACTORS 
Trade wars linger on
“Sober curious” and “mindful drinking” are entering the zeitgeist
Figure 20: Dry January mentions on social media, 2013-19
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Tequila’s winning streak continues
Growth of super premium gin a sign of things to come
Technology creates new spirit opportunities
WHAT’S WORKING
Tequila can be the new Scotch
Flavored rums can cut into vodka’s market share
Cocktail culture alive and well
Figure 21: Incidence of spirits used in cocktails, select spirit types, Q3 2016 – Q3 2019
WHAT’S STRUGGLING
It’s Tito’s world; other vodka brands are just living in it
WHAT TO WATCH
Gin has permission to be bold
A golden age for RTD cocktails?
AR packaging can enhance a brand’s story
Online spirit sales will grow slowly but surely
Figure 22: Reasons for not buying alcohol online, August 2019
Figure 23: Online alcohol purchase drivers, August 2019
THE CONSUMER – WHAT YOU NEED TO KNOW 
Millennials are the most important consumer group for spirit brands
Higher end brands can capture new drinking occasions
Boomers are primed for trading up
Gen Z may respond to the stories behind spirit brands
ALCOHOL CONSUMPTION
White spirits lead dark
Figure 24: Alcohol consumption, net any consumption, September 2019
Hispanics and Millennials overindex as white spirit drinkers
Figure 25: White/dark spirit drinker demographics, indexed against all consumers, September 2019
WHITE SPIRIT CONSUMPTION
Vodka dominates the white spirits market
Figure 26: White spirit consumption, among white spirit drinkers, September 2019
Millennials remain core white spirit drinkers
Figure 27: White spirit consumption, among white spirit drinkers, by generation, September 2019
Build white spirit brand loyalty among Hispanics
Figure 28: White spirit consumption, among white spirit drinkers, by race/ethnicity, September 2019
REASONS FOR NOT DRINKING WHITE SPIRITS
Ease new consumers into the market
Figure 29: Reasons for not drinking white spirits, September 2019
SPIRIT BRAND TIER PURCHASES
White spirits are under-represented in the super premium brand tier
Figure 30: Spirit brand tier purchases, among exclusive spirit type drinkers, September 2019
Millennials may be premium drinkers, but don’t neglect older consumers
Figure 31: Spirit brand tier purchases, by generation, September 2019
SPIRIT OCCASIONS BY BRAND TIER
Higher end brands have greatest cross-occasion potential
Figure 32: Correspondence analysis, spirit occasions by brand type, September 2019
Figure 33: Spirit occasions by brand type, September 2019
MAKING COCKTAILS AT HOME
Take cocktail culture from the bar to the home
Figure 34: At home cocktail attitudes, among spirit drinkers who make cocktails at home, by exclusive spirit type consumed, September 2019
Boomers have an underlying interest in cocktails
Figure 35: At home cocktail attitudes, among spirit drinkers who make cocktails at home, by generation, September 2019
Ecommerce can satisfy the home bartender
Figure 36: At-home cocktail attitudes, among spirit drinkers who make cocktails at home, by spirit behaviors, September 2019
SPIRIT FLAVOR INTEREST
Favorite familiars can give way to exciting flavors
Figure 37: Spirit flavor interest, by exclusive spirit type drinkers, September 2019
Gin drinkers like adventure, while rum drinkers prefer indulgence
Figure 38: Spirit flavor interest, by type of white spirit consumed, September 2019
Fail fast with new flavors sold online
Figure 39: Spirit flavor interest, by spirit behaviors, September 2019
SPIRIT BEHAVIORS
Shifting attitudes toward alcohol apparent among Gen Z
Figure 40: Spirit behaviors, by generation, September 2019
SPIRIT PRODUCT INTEREST
Harness the success of hard seltzers
Figure 41: Product interest, among exclusive spirit type drinkers, September 2019
Alcohol alternatives need to be premium
Figure 42: Product interest, by white spirit brand tier drinkers, September 2019
Mocktail by day, mixer by night
Figure 43: Product interest, by white spirit brand tier drinkers, September 2019
SPIRIT ATTITUDES
Spirits aren’t healthful but are less bad than beer
Figure 44: Spirit attitudes, among exclusive spirit type drinkers, September 2019
Figure 45: Spirit attitudes, by food/drink shopper segmentation, September 2019
Gen Z needs guidance
Figure 46: Spirit attitudes, by generation, September 2019
Figure 47: Spirit attitudes, by generation, September 2019
Focus on the craft of gin
Figure 48: Spirit attitudes, by type of white spirit consumed, September 2019
SPIRIT PURCHASING BEHAVIORS
Consumers know what they want but are open to suggestions
Figure 49: Spirit purchasing behaviors, among exclusive spirit type drinkers, September 2019
Gen Z shops with an open mind
Figure 50: Spirit purchasing behaviors, by generation, September 2019
WHITE SPIRIT ASSOCIATIONS
White space exists for each white spirit type
Figure 51: White spirit associations by spirit type, rebased among spirit type drinkers, September 2019
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Figure 52: Vodka brand tier definition
Figure 53: Rum brand tier definition
Figure 54: Tequila brand tier definition
Figure 55: Gin brand tier definition
Mintel Menu Insights
Mintel Food and Drink Shopper Segmentation
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET 
Figure 56: Total US sales and forecast of distilled spirits, at inflation-adjusted prices, 2014-24
Figure 57: US volume sales and forecast of white spirits, 2014-22
Figure 58: Total US volume sales of white spirits, by segment, 2017 and 2019