The US spirits market faces many changes, such as less frequent consumption and consumers’ greater health awareness, especially among younger consumers, impacting the US spirits market’s growth. However, consumer trends such as revenge spending and premium indulgence could counter the growth impact.
Alcoholic Beverage Consumer Insights
2 in 5 US consumers purchased alcoholic beverages in the past year, and over half of alcoholic beverage consumers bought spirits. Consumer data shows that consumers were often influenced by the premium quality of their preferred spirits. 65% of US consumers maintained their spirits consumption from 2022 to 2023. However, there is an increasing alcoholic beverage trend that reveals some consumers shifted to less frequent consumption, noting that fewer consumers are drinking spirits daily or weekly, and instead, more are drinking spirits monthly.
Alcohol-Free Beverage Consumer Insights
Increased consumer health awareness and health goal-chasing also impact the US spirits market. Consumers are increasing their consumption of alcohol-free alternatives because they view it as healthier, and offers them more control over how much they drink. This alcoholic beverage trend is occurring side by side with consumers embracing on-premise drinking occasions such as bars and restaurants as pandemic concerns recede.
Innova predicts the alcohol-free beverage segment will continue establishing itself in future drinking culture. As for alcoholic and alcohol-free beverage trends, expect to see healthier and more inclusive options emerge, such as vegan, no sugar, or additives claims.
NPD in US Spirits Market
Launches in the food and beverage industry have soared at a +53% CAGR between 2018 and 2022, but launches in the US spirits market decreased -3% CAGR over the same period. This decline has resulted in spirits dropping from 29% to 19% of total alcoholic beverage launches in the United States. Despite the decline in spirit launches, the US market’s growth stories include the emergence of alcohol-free alternatives – drinks with a 0.0% ABV – and tequila from the neighboring country of Mexico. Innova also advises to be on the lookout for more mezcal launches in company with new types of regional spirits.
US Spirits Market Leaderboard
Of all spirits launches in the US spirits market, whiskey dominated US spirits with 63% of launches and an impressive +18% CAGR growth, surpassing all other subcategories. Whiskey launches were high priced and had high alcohol content. Premium-priced launches (US$90+) rose at a +32% CAGR, constituting 80% of whiskey launches. Additionally, whiskey accounted for almost three-quarters of limited edition launches, of which 90% had an ABV of 50% or higher. Second and third place in the US spirits market launches leaderboard go to tequila and other spirits, both experiencing a +3% CAGR between 2018 and 2022.
Spirits Consumers Across Generations
Alcoholic spirits are perceived to provide relaxation and stress relief for all legal consumers, promoting emotional wellbeing. However, this segment reveals that generations cope differently. Younger consumers seem to be more open to alcohol-free alternatives like adaptogen and cannabis-infused drinks, which could be attributed to the increased awareness of health concerns surrounding alcohol as well as the rise of health-conscious lifestyles. Alcohol-free options also offer guilt-free socializing for health-conscious consumers. Older generations prefer traditional craft spirits and premium options since they are more likely to have the income for premium options and appreciate familiarity.
Personal preference is of great importance when it comes to alcohol consumption, so expect to see more alcoholic and alcohol-free products that highlight their use of fair farming and regenerative methods.
What’s Next?
Premiumization will persist through price increases and limited-edition US spirits market launches. As consumers increasingly focus on holistic wellbeing, especially younger generations of consumers, the launches of more alcohol-free alternatives will continue to rise. Heightened concerns for personal health will fuel the emergence of clean-label spirits, emphasizing “free from” additives, preservatives, sugar, and vegan attributes.
This article is based on our report, “Liquid Luxuries: Innovation in Spirits in the US.”
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