IWSR Magazine
With sales up and global demand on the rise, the outlook for US whiskey is positive.
The revival of the US whiskey category continues to gather momentum. Global sales increased by around 6% in 2017 over 2016 to reach 46.4m nine-litre cases. This is led by surging sales in the domestic US market, as well as a growing following in international markets.
Encouragingly, there remains considerable headroom for future growth if you consider that the category remains significantly below its historic high. It is sometimes forgotten that US whiskey went through a long period of decline and at one stage was much larger than it is today. In 1970 the North American whiskey market was 80m cases and most of that was derived from the US alone. Keep in mind that the population of the US, and indeed the world, was significantly smaller in 1970 than it is today. It still has another 32m cases to get back to its 1970's high and even then, per capita consumption in the US would be well below the levels seen then.
Heaven Hill president Max Shapira says: "As large as the US whiskey category is today, with the growth that we have had over the last few years, it is still much smaller than in the 1950s and early '60s. That is the US alone. Then, if you factor in the worldwide opportunity, it really highlights the potential. If you take those together, we are looking at long-term and consistent growth for this category." [...]
The IWSR's latest forecasts bear this out and predict that the US whiskey category will add some 12.2m cases worldwide through 2022, representing a CAGR of 4.8%.
The US domestic market alone will add some 9.5m cases if those projections hold true. That projection is based roughly on the assumption that current growth rates will be maintained. US whiskey grew by 5.5% in 2017 in the domestic market last year to surpass 30m cases. The current renaissance in US whiskey is fueled by several factors, not least a generational shift in consumption trends. Younger consumers in particular are increasingly rediscovering Bourbon and Tennessee whiskey, differentiating themselves from their parents' preferences. This is driven by a broader reversion by US consumers toward brown spirits. Generally, today's consumers are rediscovering flavor. They are looking toward the spirit rather than mixer to provide the flavor.
This plays to the strengths of US whiskey's typically smooth and distinctive taste profile. This flavor renaissance can take many forms, including the rediscovery of classic cocktails such as the Whiskey Sour, the Manhattan or the Old-Fashioned, which bring out the flavor of whiskey rather than masking it.
Consumer interest in provenance and authenticity is also benefiting a category with a rich history and traditions. Moreover, popular culture is having an influence on demand for US whiskey. Successful TV programs such as Mad Men, Boardwalk Empire and Moonshiners have proven to be great promotional vehicles for US whiskey, giving the category an added cachet among new consumers.
The steady stream of new brands and innovations, particularly the move into flavors, is helping to pique consumer interest and attract new demographics. Certainly, flavors have added a new dimension to the category.