Market Trends, Part 1
Ever wondered how much alcohol is consumed in the U.S.? Well if you have, I’m here to tell you it is a sizable amount to swallow, with 1.5 billion liters (170.3 million 9-liter cases) consumed alone in 2005. The market is growing at around 2.8% based on an annual compound growth rate (ACGR) (around an additional 4.6 million cases per year) and projections are for the market to continue to grow at this rate until 2010.
The growth in consumption for 2005 was primarily among the Rum and Vodka categories, increasing by 6% and 4.4% respectively. The Rum and Vodka categories experienced the largest case volume gain of all distilled spirit categories, increasing by 1.2 million and 2 millions cases respectively.
Strong gains were seen in other distilled spirit categories in 2005 as well; with Brandy & Cognac increasing 0.7% to 10.2 million cases, while Cordials & Liqueurs increased 3.3% to 20.7 million cases and Tequila increased 9% to 9 million cases. Both Gin and Prepared Cocktail markets declined by 0.6% and 0.5% respectively. Vodka over took Whisky as the category with the largest case sales volume. Whisky dominance has diminished at the expenses of white spirits popularity and mix-ability. The Whisky sector experienced a slight increase of 0.2% to 44.5 million cases.
Tequila had the highest ad spending per case by distilled spirit category in 2005, with $4.19 per case being spent. This accounts why the category had the highest case growth rate. Brandy & Cognac had the lowest ad spending per case with only $0.85 spent on advertising per case sold.
In relation to new distilled spirits introduced, Vodka and Rum experienced the highest introduction of new products with 40 and 24 new brands respectively over 2005. In the Vodka category, over the past five years, almost 260 new brands were introduced in the U.S. alone. Brandy & Cognac and Canadian whisky experienced the least. Brandy & Cognac only had 2 new brands introduced and Canadian Whisky had none. The Brandy & Cognac sector is the least saturated sector in terms of new brands introduced and advertising spent.
This all said, past and current data does not indicate where new things are happening, like what will happen when Mendis coconut brandy is launched. Data (such as what is discussed above) is good to understand the market though it does not provide any indication as to where the next big product is coming from. Generally large multi-national beverage companies will rely on industry data to predict trends and where to grow their product portfolio, much like sheep following the herd. These companies will jump in and buy out leading brands in the hot new category at excessive premiums to the company’s book value they are buying, just to catch up with the market trend, due to their lack of for sight. So what does all this mean…check back tomorrow to read the conclusion of Market Trends, Part 2.
The growth in consumption for 2005 was primarily among the Rum and Vodka categories, increasing by 6% and 4.4% respectively. The Rum and Vodka categories experienced the largest case volume gain of all distilled spirit categories, increasing by 1.2 million and 2 millions cases respectively.
Strong gains were seen in other distilled spirit categories in 2005 as well; with Brandy & Cognac increasing 0.7% to 10.2 million cases, while Cordials & Liqueurs increased 3.3% to 20.7 million cases and Tequila increased 9% to 9 million cases. Both Gin and Prepared Cocktail markets declined by 0.6% and 0.5% respectively. Vodka over took Whisky as the category with the largest case sales volume. Whisky dominance has diminished at the expenses of white spirits popularity and mix-ability. The Whisky sector experienced a slight increase of 0.2% to 44.5 million cases.
Tequila had the highest ad spending per case by distilled spirit category in 2005, with $4.19 per case being spent. This accounts why the category had the highest case growth rate. Brandy & Cognac had the lowest ad spending per case with only $0.85 spent on advertising per case sold.
In relation to new distilled spirits introduced, Vodka and Rum experienced the highest introduction of new products with 40 and 24 new brands respectively over 2005. In the Vodka category, over the past five years, almost 260 new brands were introduced in the U.S. alone. Brandy & Cognac and Canadian whisky experienced the least. Brandy & Cognac only had 2 new brands introduced and Canadian Whisky had none. The Brandy & Cognac sector is the least saturated sector in terms of new brands introduced and advertising spent.
This all said, past and current data does not indicate where new things are happening, like what will happen when Mendis coconut brandy is launched. Data (such as what is discussed above) is good to understand the market though it does not provide any indication as to where the next big product is coming from. Generally large multi-national beverage companies will rely on industry data to predict trends and where to grow their product portfolio, much like sheep following the herd. These companies will jump in and buy out leading brands in the hot new category at excessive premiums to the company’s book value they are buying, just to catch up with the market trend, due to their lack of for sight. So what does all this mean…check back tomorrow to read the conclusion of Market Trends, Part 2.
Labels: market trends 1
posted by Christopher Spafford Richardson at
11:58 AM
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