Despite inflation, consumers continue to splurge on luxury spirits

Roaring inflation hasn’t slowed consumer spending on one item: luxury liquors.

Luxury spirits brands grew 15% in the third quarter compared to a year earlier, even as rising prices force Americans to cut discretionary spending, according to the latest Distilled Spirits Luxury Brands Index Council. The index looks at sales of high-end spirits brands and tracks the performance of brands with a 750ml retail price of at least $50.

Due to inflation and lackluster overall growth of economic activity, the growth rate in 2022 was slower compared to the 50% year-over-year growth rate we saw in 2021, according to the report. Still, the data shows that luxury spirits “showed healthy growth” during the quarter, even amid a challenging economic environment. according to the index.

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This growth, albeit at a slower pace, underscores how resilient the sector is even in the face of persistent inflation, high interest rates and growing fears of a recession.

Alcoholic beverage prices rose 5.5% annually in November, less than the 7.1% increase in the total consumer’s price index.

Consumers still view liquor as “an attainable luxury,” Distilled Spirits Council head of policy and strategy Christine LoCascio said in a statement.

“Sales of luxury spirits are also being boosted by a resurgence in restaurants and bars emerging from the pandemic, as well as consumers elevating their cocktail and bar experiences at home,” LoCascio said.

it’s a positive sign heading to the holidayswhich is a “critical sales season for spirits retailers,” according to Lisa Hawkins, senior vice president of public affairs for the Distilled Spirits Council.

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Liquor store sales in December are typically 40% higher than the monthly average for the rest of the year, according to Hawkins.

Overall, American whiskey had the largest increase during the third quarter, growing 33% year-on-year. It may not come as a surprise given that sales of American luxury whiskeys have skyrocketed nearly 500% in the last five years, according to Hawkins.

“The American whiskey boom in the US is being driven by a number of key factors,” Hawkins said. This includes increased millennial interest in cocktails and new experiences, as well as the return of classic American whiskey cocktails like the Manhattan and the Old Fashioned and the consumer’s fascination with heritage spirits.

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The trend of celebrities debuting their own brands of American whiskey and the phenomenal growth of craft distilling are also contributing to its popularity. For example, the number of distilleries in the nation has grown from fewer than 100 to more than 2,300 in the past 15 years, Hawkins added.

“The growth of small distilleries is fueling distillery tourism and introducing new adult consumers to American whiskey in towns and cities across the country,” he said.

According to the index, tequila had the second highest growth during the quarter, increasing 29% annually.

However, both Japanese and Irish whiskey saw solid growth, rising 20% ​​and 17% respectively, the data showed.

champagne

Hard liquor isn’t the only thing that’s so successful. According to Wine Spectator Senior Editor Alison Napjus, consumer demand for champagne it has also reached an all-time high.

Imports to the US increased 33% in 2021 compared to 2019, Napjus said, adding that this demand will continue in 2022 as well.

Napjus pointed to LVMH Möet Hennessy, which reported that its champagne business grew 16% in the first half of the year.

Its brands include Krug, Dom Pérignon, Ruinart, Veuve Clicquot and Möet & Chandon Champagnes. The latter two account for about two-thirds of the US champagne market, according to Napjus.

Heart	Safety	Latest	Change	Change %
LVMUY	LVMH MOËT HENNESSY LOUIS VUITTON SE	142.9299	-2.05	-1.41%

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