Drinks Up! Sales of Luxury Booze Surging Again, and So Might Prices
Americans bought more high-end and super-premium drinks in 2010 than the year before, says the Distilled Spirits Council of the United States (DISCUS). And while it is a good sign for the economy, the trade group said the levels of purchase are not yet back to pre-recession levels.Overall spirits consumption was up 2% last year, a slower rate of growth than the 2.9% average annual growth between 2000 and 2007. Sales of high-end brands and products by volume were up 3.3% and sales of super-premium products were up by 10.6%, said DISCUS. Sales of super-premium products rose an average annual rate of 14.7% 2000-2007. "We aren't back yet to where we were, but the signs are all there for a steady recovery," says DISCUS CEO Peter Cressy.
While the news that people are feeling comfortable about buying super-premium liquor is a good sign for the economy, it also means prices to could climb in 2011. Any uptick in consumer demand could embolden spirits makers to raise prices.
"After two years of weak pricing, they (spirits makers) are probably looking for that kind of opportunity," said DISCUS Chief Economist David Ozgo Ozgo said. If prices do come up, he said spirits makers could see revenue rise in the 2.5 percent to 3 percent range this year. At the same time, any price increases "might tamp down volume a little bit," he added, forecasting an increase of 2.5 percent or less this year.
Super premiums are brands such as Grey Goose ($26.00) and Effen Vodka, ($30.00) single-malt Scotch whiskies like Ardbeg Supernova ($120.00) and Johnnie Walker Blue ($180.00), and American Whiskies like Woodford Reserve ($30.00).
