Dark Spirits - US - December 2019

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Market overview
Five-year growth anchored by robust whiskey/whisky sales
Figure 1: Total US volume sales and forecast of dark spirits, by segment, 2014-22
The issues
Dark spirits characterized as an “old man’s drink”
Figure 2: White/dark spirit drinker demographics, September 2019
Non-drinkers just don’t think dark spirits are for them
Figure 3: Reasons for not drinking dark spirits, September 2019
The opportunities
Millennials are engaged; don’t forget everyone else
Figure 4: Dark spirit consumption, among dark spirit drinkers, by generation, Part I, September 2019
Cocktails are the path to expanding the base
Figure 5: Make cocktails at home, by key demographics, September 2019
Keep it casual, premium, and lean into healthy innovation
Figure 6: Product interest, by generation, September 2019
THE MARKET – WHAT YOU NEED TO KNOW
Spirits top $67 billion, trend expected to continue
American and Irish whiskeys drive growth
Trade wars, wellness trends and cannabis legalization pose challenges
MARKET SIZE AND FORECAST
Continued growth of $67 billion spirit market
Figure 7: Total US sales and fan chart forecast of distilled spirits, at current prices, 2014-2024
Figure 8: Total US sales and forecast of distilled spirits, at current prices, 2013-23
MARKET BREAKDOWN
Whiskey/scotch/bourbon comprise leading share
Figure 9: Total market share of volume sales, by segment, 2019
From 2017-19, brandy, cognac and Armagnac build share
Figure 10: Total US volume sales and forecast of dark spirits, by segment, 2017-2019
Five-year trends show long-term growth of whiskey/whisky
Figure 11: Total US volume sales and forecast of dark spirits, by segment, 2014-22
Figure 12: US volume sales of whiskey/whisky, by type, 2014-19
Straight American whisky and Irish whiskey drive sales and build share
Figure 13: US volume sales of whiskey/whisky, by type, 2014-19
Figure 14: US volume sales of whiskey/whisky, by type, market share, 2017 and 2019
On-premise spirit sales make gains
Figure 15: US volume sales of total distilled spirits, by channel, 2014-18
MARKET PERSPECTIVE
Dark sprits are fourth most widely consumed alcoholic beverage
Figure 16: Alcohol consumption, most often and also drink, September 2019
Spirits sales growth outpaces both wine and beer
Figure 17: US retail market size, spirits and wine/sparkling wine, 2017-19
White spirit innovation could undercut dark spirit’s growth
Figure 18: Distribution of spirits sales by volume, by segment, 2019 (estimate)
Figure 19: Total US volume sales of spirits, by segment, 2017 and 2019
RTD alcoholic beverages = competitive opportunity
Figure 20: Total US volume sales and forecast of flavored malt beverages, 2014-22
Figure 21: Total US volume sales and forecast of spirits-based prepared cocktails, 2014-22
Spirit drinkers enjoy at-home cocktail making, seek premium mixers
Cannabis legalization keeps brands on edge
Figure 22: Reasons for using cannabis, October 2019
MARKET FACTORS 
Trade wars impact whiskey sales
Engaging Gen Z is a challenge
Figure 23: consumption of dark spirits, by generation, September 2019
Wellness and social trends may spur reduced, selective consumption
KEY PLAYERS – WHAT YOU NEED TO KNOW 
American and Irish whiskeys enjoy strong growth
Brandy, cognac and Armagnac continue to build share
Canadian whiskey and scotch see sales flag, and value brands struggle
Brands should be poised for ecommerce sales
WHAT’S WORKING?
American and Irish whiskeys propel the market forward
Figure 24: US Spirits market – whisky and scotch change in volume sales, by brand tier - 2018
Whiskey – especially bourbon – also benefit from strong presence on cocktail menus
Figure 25: Bourbon cocktails - 2019
Limited editions celebrate pop culture
Small distilleries grow craft spirits
Brandy, cognac and Armagnac continue to grow share
WHAT’S STRUGGLING?
Trade wars dampen scotch sales; Canadian whiskey lags
Demand for premium leaves value spirits in decline
Trade war likely to dampen overseas growth
Rum sales comparably lackluster, with potential at the high end
WHAT TO WATCH
Opportunities in online retail and subscription services
Mobile apps may be valued by Millennials and engage with Gen Z
 THE CONSUMER – WHAT YOU NEED TO KNOW 
Millennials drive dark spirit consumption
Expand the base with women and Gen Z
Cocktail recipes, premium mixers can take the edge off
Premium innovation can widen the base
ALCOHOL CONSUMPTION
About a third consume dark spirits
Figure 26: Alcohol consumption, most often and also drink, September 2019
Spirits “on the rocks” enjoy premium associations
Figure 27: Associations with alcoholic beverages, July 2019
Dark spirits consumer base skews male, older and more affluent
Figure 28: White/dark spirit drinker demographics, September 2019
CHANGE IN DARK SPIRIT CONSUMPTION 
Increased consumption of dark spirits buoys market
Figure 29: change in alcohol consumption, September 2019
Millennials most likely to be increasing usage
Figure 30: change in dark spirits consumption, by generation, September 2019
TYPES OF DARK SPIRITS 
Bourbon and American whiskey continue to dominate
Figure 31: Dark spirit consumption, among dark spirit drinkers, September 2019
Opportunities with women in rum, flavored whisky, brandy/cognac
Figure 32: Dark spirit consumption, among dark spirit drinkers, by gender, September 2019
Millennials have broad palates and dark spirit repertoires
Figure 33: Dark spirit consumption, among dark spirit drinkers, by generation, September 2019
Medium income HHs enjoy range of spirits, as everyday luxury
Figure 34: Dark spirit consumption, among dark spirit drinkers, by HH income, September 2019
REASONS FOR NOT DRINKING DARK SPIRITS
Taste limits usage
Figure 35: Reasons for not drinking dark spirits, September 2019
Taste is a hurdle for women; health and cost deter some men
Figure 36: Reasons for not drinking dark spirits, by gender, September 2019
Gen Z barriers can be overcome
Figure 37: Reasons for not drinking dark spirits, by generation, September 2019
SPIRIT BRAND TIER PURCHASES
Popular and higher end spirits brands are most widely used
Figure 38: Spirit brand tier purchases, among exclusive spirit type drinkers, September 2019
Millennials stand out as key to the super premium market
Figure 39: Spirit brand tier purchases, by generation, September 2019
Income is a leading factor shaping brand choice
Figure 40: Spirit brand tier purchases, by HH income, September 2019
SPIRIT OCCASIONS BY BRAND TIER
Occasion drives tier choice
Figure 41: Correspondence Analysis – Symmetrical map – Spirit occasions by brand type, September 2019
Figure 42: Spirit occasions by brand type, September 2019
MAKING COCKTAILS AT HOME
More than three quarters of spirit consumers make cocktails at home
Figure 43: Make cocktails at home, by key demographics, September 2019
More than half enjoy making cocktails from scratch
Figure 44: At home cocktail attitudes, among spirit drinkers who make cocktails at home, among exclusive spirit type drinkers, September 2019
Millennials like cocktails at home
Figure 45: At home cocktail attitudes, among spirit drinkers who make cocktails at home, by generation, September 2019
SPIRIT FLAVOR INTEREST
In dark spirits, smoky and spicy flavors lead
Figure 46: Spirit flavor interest, among exclusive spirit type drinkers, September 2019
Women seek sweet, fruity and floral flavors in their spirits
Figure 47: Spirit flavor interest, by gender, September 2019
Millennials seek range of subtle flavors, while Gen Z wants dessert
Figure 48: Spirit flavor interest, by generation, September 2019
SPIRIT BEHAVIORS
Almost a third of Gen Z have taken a break from alcohol
Figure 49: Spirit behaviors, by generation, September 2019
SPIRIT PRODUCT INTEREST
Robust opportunity in RTDs, functional and premium spirits
Figure 50: Product interest, among exclusive spirit type drinkers, September 2019
RTD with added health benefits may be a gateway for women to dark spirits
Figure 51: Product interest, by gender, September 2019
Figure 52: Product interest, by generation, September 2019
SPIRIT ATTITUDES
Craft is at the heart of premium for dark spirits drinkers
Figure 53: Spirit attitudes, among exclusive spirit type drinkers, September 2019
Gen Z is ripe for education and outreach
Figure 54: Spirit attitudes, by generation, September 2019
Figure 55: Health-related Spirit attitudes, by generation, September 2019
SPIRIT PURCHASING BEHAVIORS
About half know what brand they want, but still like to browse
Figure 56: Spirit purchasing behaviors, among exclusive spirit type drinkers, September 2019
Men more likely to have set brand allegiance, but be nudged by sales
Figure 57: Spirit purchasing behaviors, by gender, September 2019
Gen Zs and Millennials open to browsing, reviews, recommendations
Figure 58: Spirit purchasing behaviors, by generation, September 2019
DARK SPIRIT ASSOCIATIONS
Spirits you gift may be different from what you purchase for yourself
Figure 59: Correspondence Analysis – Symmetrical map – Dark spirit associations, September 2019
Figure 60: Dark spirit associations, September 2019
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Consumer qualitative research
Mintel Menu Insights
Purchase Intelligence
Mintel Market Sizes
Mintel Food and Drink shopper segmentation
Social media methodology
Corrrespondence Analysis - Methodology
TURF analysis - methodology
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET 
Figure 61: Total US sales and forecast of distilled spirits, at inflation-adjusted prices, 2014-24
Figure 62: US volume sales and forecast of dark spirits, 2014-22
Figure 63: US volume sales and forecast of dark spirits, by segment, 2014-22
Figure 64: US volume sales of dark and white distilled spirits, by channel, 2014-18