Current 12-month rolling volume trends (October 2022-September 2023) are down -3.5% for Spirits and -7.4% for Wine. Year-to-date (January 2023-September 2023) data shows Spirits down -5.1% and Wine down -8.4%. When the fast-growing Premixed Cocktails segment is removed the picture for Spirits is noticeably worse with 12-month trends of -5.2% and year-to-date dropping to -6.7%.
Premixed Cocktails, up +8.6% and Tequila/Agave Spirits, up +2.8%, remain growth areas for Spirits in the latest 12-month ending data. Interestingly, the growth profile for Tequila/Agave Spirits has reversed in the last year with products over $50.00 down -2.7% and those under $10.00 up +5.9%.
Understandably, price inflation continues to take its toll on the consumers’ spending power, impacting Premiumization across all Spirits categories. Currently, Spirits over $25.00 are outperforming those under $25.00 by only 90 basis-points in trend compared to last year at this time, when the gap was 500 basis points.
Another growth segment for Spirits remains in the on-premise where consumers consistently choose Spirits as their primary beverage when out at a restaurant or bar. Spirits continue to be resilient in the on-premise with a growth rate of +4.4% compared to Wine which is down -2.2%. While not quite back to their pre-COVID level, Spirits continue to perform well in the on-premise channel.
Most segments of Wine continue to struggle, however Prosecco remains the darling of the Wine category up +3.9% in the 12-month ending data. Analysts expect to see this trend continue as the industry heads into the important holiday season. Growth on Prosecco is very balanced by channel with on-premise up +3.0% and off-premise up +4.1%.
As SipSource analysts continue to search for a light at the end of the long, dark tunnel that has been 2023 for Wine and Spirits volume growth, they point to the three consecutive challenging holiday seasons which provide the industry with softer comparative numbers from last year. Comparable trends from the last three months of 2022 are more friendly with Spirits at +0.7% and -5.5% for Wine. This should provide some tailwinds for the categories, and while SipSource analysts do not expect either to get back to positive trends, we do expect to see improvement.