Tequila and American whiskey lead accelerated growth in premium spirits

By Rachel Arthur contact

- Last updated on GMT

Pic:getty/annabellebreakey
Pic:getty/annabellebreakey

Related tags: spirits, Premium, Us, Tequila, American whiskey, Scotch whisky, Cognac, Irish whiskey

Premiumization has been a key trend for spirits for years: but the pandemic has helped accelerate growth, according to the Distilled Spirits Council of the United States (DISCUS).

The organisation, which represents the leading producers and marketers of distilled spirits, has created the Luxury Brand Index (LBI) as a tool to track sales of premium spirits brands (those which retail for $50+ for a 750ml bottle).

It shows that luxury brands grew 47% in Q3, 2021, compared to the same quarter in 2020. The pace of growth has been more than twice the annual average growth rate of 18% between 2015 and 2020.  

In particular, tequila saw the biggest gains with 83% annual growth rate. This was followed by American whiskey and Cognac at around 38% each.

Following the removal of tariffs, Scotch whisky has rebounded with a 20% growth rate, after showing losses in 2020. Irish whiskey, too, showed similar growth of 19%.

Japanese whisky saw a decline in Q3, although this follows average growth of 14% over the past five years.

“In addition to the premiumization trends of recent years, the pandemic forced many consumers to change the way they purchased and enjoyed their favorite spirits,”​ said Christine LoCascio, chief of public policy at DISCUS.

“What resulted was a continued shift towards high-end spirits products and experimentation with cocktail creation at home. The restrictions brought on by the pandemic served as a catalyst for an already growing category in the spirits marketplace, and we are confident this trend will continue for holiday purchases.”

Long term trends

All the premium spirits categories in the index (including cognac, tequila, American whiskey, Scotch, and Irish whiskey) have grown over the five years between the third quarter of 2016 and 2021: with an average growth rate of 22%.

The star performers are American whiskey and tequila: which recorded 46% and 41% annual percent growth respectively over the period.

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