U.S. spirits achieved record market share and sales in 2022 as demand persisted, underscoring the sector’s resiliency within the challenging environment.
Even with inflation dampening discretionary spending, there has been continued consumer interest in premium spirits, which in turn has helped to “bolster the fragile U.S. hospitality industry,” according to the Distilled Spirits Council of the United States (DISCUS).
During the Distilled Spirits Council annual economic briefing Thursday, CEO Chris Swonger reported that spirits supplier sales in the U.S. increased 5.1% in 2022, reaching a total of $37.6 billion. Volumes also rose 4.8% to 305 million 9-liter cases, Swonger reported.
According to DISCUS data, 2022 was the 13th year in a row that spirits gained market share of the total U.S. beverage alcohol market. It was also the first time that spirits supplier revenues surpassed beer, which accounts for 41.9% of the market share, according to the national trade association.
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Christine LoCascio, DISCUS chief of public policy & strategy, noted that more than 60% of the spirits sector’s total revenue derived from sales of high-end and super-premium spirits, in particular, tequila and American whiskey.
Over the year, tequila and mezcal sales were up 17.2% while American whiskey sales were up 10.5%.
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Swonger noted that this thriving cocktail culture has helped to buoy the entire hospitality industry, which was hit particularly hard due to virus-related shutdowns and restrictions in the early days of the pandemic.
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Although sales volumes at on-premise establishments are still below pre-pandemic levels, the trade association says they are rebounding.
Meanwhile, off-premise sales volumes saw sharp gains in 2020 and remained steady in 2021 and 2022, according to the data.
The Labor Department reported earlier this month that employment in leisure and hospitality in January was still below the February 2020 level by 495,000, or 2.9%.
However, the “recovery of hospitality businesses is trending in the right direction,” Swonger said.
Last month, leisure and hospitality added 128,000 jobs. That is up from an average of 89,000 jobs per month in 2022, according to data from the Labor Department.
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In particular, food services and drinking places added 99,000 jobs, while employment continued to trend up in accommodation, which saw job gains of 15,000, according to the Labor Department.
Swonger noted that the trade association is still urging federal and state legislators to find ways to support these businesses as they recover and “not saddle them with unnecessary market restrictions or higher taxes.”
He further noted that “measures to modernize the marketplace by providing spirits consumers with greater access and more choices” such as cocktails to-go and direct-to-consumer shipping will help “continue to spur economic growth.”