White Spirits - US - October 2015

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Slow white spirits growth continues
Figure 1: US volume sales of white spirits, 2010-20
Dark spirits seen as superior to white spirits
Figure 2: Spirits preference, by generation, June 2015
Millennials heaviest on-premise spirits consumer
Figure 3: Drinking locations – Liquor, by gender, April 2014 to June 2015
The opportunities
Preference for super premium
Figure 4: Price, by demographics, June 2015
Figure 5: Price, by demographics, June 2015
Flavor innovation has potential to create complexity, sophistication
Figure 6: Attitudes and behaviors – Any agree, by demographics, June 2015
Interest in health, ingredients driving natural/organic, labeling preferences
Figure 7: Attitudes – Any agree, by demographics, June 2015
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Distilled spirits slow growth continues
Vodka growth remains small but positive, tequila sees strongest growth
Taste, sophistication driving competition with dark spirits
Consumers drink most spirits off-premise
MARKET SIZE AND FORECAST
Distilled spirits grows, albeit slowly
Figure 8: Total US sales and fan chart forecast of distilled spirits*, at current prices, 2010-20
Figure 9: Total US retail sales and forecast of distilled spirits*, at current prices, 2010-20
Figure 10: Total US retail sales and forecast of distilled spirits*, at inflation-adjusted prices, 2010-20
MARKET BREAKDOWN
White spirits volume sales remain stagnant
Figure 11: US volume sales of white spirits, 2010-20
Vodka remains largest segment, tequila forecast to catch up to rum
Figure 12: US volume sales of white spirits, 2010-20
Tequila forecast to experience greatest growth through 2020
Figure 13: US volume sales of white spirits, 2010-20
MARKET PERSPECTIVE
Taste, sophistication driving dark spirits consumption
Figure 14: Spirits preference, by generation, June 2015
On-premise volume sales cannot compete with off-premise sales
Figure 15: US volume sales of dark and white distilled spirits, by channel, 2010-15
Figure 16: Drinking locations – Liquor, by gender, April 2014 to June 2015
MARKET FACTORS
Millennials driving spirits preferences
Figure 17: Population, by generation, 2010-20
Millennials becoming parents
Figure 18: Households with own children, by age of householder, 2013
Hispanic population experiencing growth
Figure 19: Population by race and Hispanic origin, 2010-20
Figure 20: Households with own children, by race and Hispanic origin of householder, 2013
KEY PLAYERS – WHAT YOU NEED TO KNOW
Super-premium spirits fueling growth
Innovation driven by quality ingredients, flavors, production methods
LEADING COMPANIES – VODKA
Tito’s, New Amsterdam see greatest vodka growth in 2014
Trended brand consumption, by vodka
Figure 21: Vodka consumption, by brands, trended 2011-15
Figure 22: Mean vodka consumption – Number of drinks consumed in the last 30 days, by brands, trended 2011-15
LEADING COMPANIES – RUM
Leading rum companies struggle, super-premium rums see success
Trended brand consumption, by rum
Figure 23: Rum consumption, by brands, trended 2011-15
Figure 24: Mean rum consumption – Number of drinks consumed in the last 30 days, by brands, trended 2011-15
LEADING COMPANIES – TEQUILA
Tequila companies seeing success
Trended brand consumption, by tequila
Figure 25: Tequila consumption, by brands, trended 2011-15
Figure 26: Mean tequila consumption – Number of drinks consumed in the last 30 days, by brands, trended 2011-15
LEADING COMPANIES – GIN
Super-premium gin companies see growth, value gins struggle
Trended brand consumption, by gin
Figure 27: Gin consumption, by brands, trended 2011-15
Figure 28: Mean gin consumption – Number of drinks consumed in the last 30 days, by brands, trended 2011-15
WHAT’S NEXT?
Barrel-aged and blended vodkas
Organic/natural offerings
Handcrafted
Sophisticated flavor innovation
THE CONSUMER – WHAT YOU NEED TO KNOW
The vodka drinker
The white/light rum drinker
The tequila drinker
The gin drinker
TERMINOLOGY
Terminology
Segment groups
Consumption frequency
CORE CONSUMERS
Men as white spirits consumers
Figure 29: White spirits consumption, by gender, June 2015
The Millennial white spirits consumer
Figure 30: White spirits consumption, by generation, June 2015
Parents as white spirits consumers
Figure 31: White spirits consumption, by parental status, June 2015
The Hispanic white spirits consumer
Figure 32: White spirits consumption, by race and Hispanic origin, June 2015
Acculturated Hispanics most likely drinking white spirits
Figure 33: White spirits consumption (vodka, rum, tequila, gin), by language spoken in household, April 2014 to June 2015
WHITE SPIRITS CROSS-CONSUMPTION
Majority of white spirits consumers drink a variety of types
Figure 34: White spirits consumption – Any drinking, by white spirits consumption – Any drinking, June 2015
Vodka
Figure 35: White spirits consumption – Vodka, by white spirits consumption – Vodka, June 2015
White/light rum
Figure 36: White spirits consumption – White/Light rum, by white spirits consumption – White/Light rum, June 2015
Tequila
Figure 37: White spirits consumption – Tequila, by white spirits consumption – Tequila, June 2015
Gin
Figure 38: White spirits consumption – Gin, by white spirits consumption – Gin, June 2015
WHITE SPIRITS VERSUS DARK SPIRITS PREFERENCES
White spirits drinkers prefer white spirits over dark
Figure 39: Spirits consumption, June 2015
Female white spirits drinkers should not be overlooked
Figure 40: Spirits consumption, by gender, June 2015
Dark spirits consumption impacts white spirits preferences
Figure 41: Spirits consumption, by gender, June 2015
THE VODKA DRINKER
Key analysis: Who is the vodka drinker?
Vodka consumption frequency
Figure 42: White spirits consumption – Vodka, June 2015
Figure 43: White spirits consumption – Vodka, by demographics, June 2015
Vodka with mixers most popular
Figure 44: Drink form – Any vodka, by demographics, June 2015
Frequent vodka drinkers buy premium
Figure 45: Price, by white spirits consumption – Any vodka, June 2015
THE WHITE/LIGHT RUM DRINKER
Key analysis: Who is the white/light rum drinker?
White/light rum consumption frequency
Figure 46: White spirits consumption – White/Light rum, June 2015
Core white/light rum consumer consumption frequency
Figure 47: White spirits consumption – White/Light rum, by demographics, June 2015
White/light rum with mixers is most popular
Figure 48: Drink form – Any white/light rum, by demographics, June 2015
Frequent white/light rum drinkers buy super-premium
Figure 49: Price, by white spirits consumption – Any white/light rum, June 2015
THE TEQUILA DRINKER
Key analysis: Who is the tequila drinker?
Tequila consumption frequency
Figure 50: White spirits consumption – Tequila, June 2015
Core tequila consumer consumption frequency
Figure 51: White spirits consumption – Tequila, by demographics, June 2015
Tequila neat/straight up most popular
Figure 52: Drink form – Any tequila, by demographics, June 2015
Frequent drinkers buy super-premium
Figure 53: Price, by white spirits consumption – Any tequila, June 2015
THE GIN DRINKER
Key analysis: Who is the gin drinker?
Terminology for this section
Gin consumption frequency
Figure 54: White spirits consumption – Gin, June 2015
Core gin consumer consumption frequency
Figure 55: White spirits consumption – Gin, by demographics, June 2015
Gin consumed in a wider variety of ways than other white spirits
Figure 56: Drink form – Any gin, by demographics, June 2015
Frequent gin drinkers buy super-premium
Figure 57: Price, by white spirits consumption – Any gin, June 2015
PRICE PREFERENCE
Overall white spirits consumers prefer mid-range pricing
Figure 58: Price, by demographics, June 2015
Consumption frequency influences price preferences
Figure 59: Price, by white spirits consumption, June 2015
PURCHASE INFLUENCERS
Core white spirits drinkers looking for promotions
Figure 60: Promotions, by demographics, June 2015
Frequent drinkers influenced by price promotions, sampling
Figure 61: Promotions, by white spirits consumption, June 2015
PURCHASE LOCATION
Liquor stores lead white spirits purchase location
Figure 62: Purchase location, by demographics, June 2015
Figure 63: Purchase location, by white spirits consumption, June 2015
PREFERRED ATTRIBUTES
Niche attributes create opportunities to establish authenticity
Figure 64: Attributes, June 2015
ATTITUDES TOWARD FLAVOR INNOVATION AND HEALTH
Core consumers want flavor innovation
Figure 65: Attitudes and behaviors – Any agree, by demographics, June 2015
Figure 66: Attitudes and behaviors – Any agree, by demographics, June 2015
Majority looking for BFY options
Figure 67: Attitudes and behaviors – Any agree, by demographics, June 2015
Figure 68: Attitudes toward white spirits – Any agree, by demographics, June 2015
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET
Figure 69: US volume sales of white spirits, 2010-20
Figure 70: US volume sales and forecast of white spirits, by segment, 2010-20
Figure 71: US volume sales of white spirits, by segment, 2013 and 2015
Figure 72: US volume sales and forecast of vodka, 2010-20
Figure 73: US volume sales and forecast of rum, 2010-20
Figure 74: US volume sales and forecast of tequila, 2010-20
Figure 75: US volume sales and forecast of gin, 2010-20
Figure 76: US volume sales of dark and white distilled spirits, by channel, 2010-15
APPENDIX – THE CONSUMER
Figure 77: Drinking locations – Liquor, by gender, April 2014 to June 2015
Figure 78: Drinking locations – Liquor, by generation, April 2014 to June 2015
Figure 79: Drinking locations – Liquor, by Hispanic origin, April 2014 to June 2015
Figure 80: Drinking locations – Liquor, by parental status, April 2014 to June 2015