Spirits Forecasted to Lead ‘Share of Servings’ by 2030 in the US

IWSR forecasts show that spirits are on trend to take over beer in percentage share of pure alcohol servings

IWSR anticipates that if current trend rates continue, the spirits category will overtake beer by percentage share of pure alcohol servings in 2030 for the first time in modern US history. For over two decades, Americans have continued to turn away from beer in favour of spirits. This trend has accelerated in recent years as a surge in craft and premium spirits enter the marketplace.

 

The IWSR defines a pure alcohol serving as the average drink serving prescribed by the US Department of Health and Human Services. It is important to identify each alcoholic beverage type by a standardised amount of pure alcohol as total liquid volume per drink can vary by category. This equivalency metric is as follows: beer (12 ounce serving of regular beer at about 5% ABV) = wine (5 ounce serving of still wine at about 12% ABV) = distilled spirits (1.5 ounce serving at about 40% ABV). This methodology provides a more accurate portrayal of the total beverage alcohol market because it equivalises categories in terms of pure alcohol, or servings. The two charts below show 2018’s alcohol volume by category in terms of total case volume (left) and percentage share of pure alcohol (right), which help show why this methodology provides a more thorough analysis when comparing different alcohol categories.

% Share of Bev-Alc by Case Volume, 2018

*Source IWSR 2019

 

In terms of volume, beer is clearly the leading share of cases but after focusing specifically on the alcohol content levels (pure alcohol/share of servings) the results show a more equitable story. Using IWSR forecasts for 2018-2023, data suggests beer’s CAGR will decrease -1.3% over the period, while spirits will increase by +1.6%. If these trend rates continue, by the year 2030 spirits will eclipse beer in terms of pure alcohol servings. Wine is forecast to remain steady, while mixed drinks (FMBs, RTDs, FABs) are expected to increase, and cider’s share will remain negligible.

% share of pure alcohol

*Source IWSR 2019. Pure Alcohol Serving defined as: (Beer/Cider/Mixed Drinks: 12 oz; Wine: 5 oz; Spirits: 1.5 oz)

 

While beer’s continued decline will bring total alcohol by volume down, share of serving will continue to grow.  It should be noted that the IWSR classifies alcoholic seltzers as mixed drinks (FMBs, RTDs, FABs) and not as a beer, whereas beer producers classify seltzers as beer because of its malt base. This sheds light on the traditional beer category volume decline without being buoyed by ‘malternatives’.

While beer producers have fought back over the last two years with alcoholic seltzers, consumer taste for alternative beverages continue to take market share from beer: an example is the rise of canned vodka seltzers which are hitting the market with half the calories and a vodka base, which is widely seen as better quality than malt-based products. Additionally, a recent Gallop poll found that spirits have reached their highest favourability of US drinker’s preferred alcoholic beverages since polling data began in 1992.

Spirits will continue to grow both by volume and share of servings in the future. This is based on a few key factors:

  • Occasions – Alcoholic beverage options at major sporting and entertainment events have evolved to offer consumers more options beyond beer.
  • Convenience:  Craft beer’s effect on consumer acceptance of quality products in cans has crossed over to wine and spirits. Small sizes in spirits is growing substantially and more canned cocktails are hitting the market.
  • Legal/Regulatory – Spirit brands are now able to sponsor more professional sports leagues and have wider television advertising reach than before. Laws regulating direct shipment of spirits to consumers are expected to be overturned in time, allowing for more access to spirits.
  • Cocktail Culture – Nearly 20 years of a resurgence in cocktail culture has contributed to consumer interest in craft cocktails and premium spirits. Now, in-home mixology is more prevalent especially with a rise in home bars, cocktail-making kits and machines that do mixology with the push of a button.
  • Health: The standard beer is higher in calories than most distilled spirits, and gluten-free diet trends have also affected beer. Consumer perception is that drinking spirits neat or with no-calorie mixers is a healthier option than beer.
  • Technology – Instagram and YouTube have created moments of shareable cocktail experiences while also offering guided tutorials for viewers to make drinks at home.
  • Availability – Beyond on- and off-premise venues, consumers have more access to spirits through online retailers and local craft producers.
  • Premiumization – With more brand options meeting a variety of consumer tastes and renewed interest in US whiskey, Cognac and tequila, people are willing to pay more for quality.

 

About the IWSR

The IWSR is the leading source of data and intelligence on the alcoholic beverage market. The IWSR’s database, essential to the industry, quantifies the global market of wine, spirits, beer, cider and mixed drinks by volume and value in 157 countries, and provides insight into short- and long-term trends, including five-year volume and value forecasts. The IWSR tracks overall consumption and trends at brand, price segment and category level. Our data is used by the major international wine, spirits and beer companies, as well as financial and alcoholic beverage market suppliers. The IWSR’s unique methodology allows us to get closer to what is actually consumed and better understand how markets work. Our analysts travel the world in order to meet over 1,600 local professionals to capture market trends and the ‘why’ behind the numbers.

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