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Liquor sales higher in 2011

Industry saw most growth in top-shelf brands

Liquor sales in the U.S, were up in 2011 from the previous year, stealing ground from the beer market, and consumers are back to drinking super-premium brands, according to the industry.

At its annual industry review last week in New York, the Distilled Spirits Council, a national trade group, said that last year saw a 2.4 percent growth in production – or 195.8 million 9-liter cases – a near return to pre-recession levels.

Compared with 2010, sales were up 4 percent to $19.9 billion, including a record $1.34 billion in spirit exports, the group said.

Peter Cressy, the council’s president and CEO, credited the industry’s upswing to renewed confidence in the economy, more jobs and marketing innovation, including social networking.

Looser liquor laws, such as newly allowed Sunday sales in Georgia, were another reason given. As far as liquor exports, Cressy said, recent trade developments have made it easier.

“There’s also a greater fascination with the history of spirits,” Cressy said, adding that interest in the heritage of such spirits as Tequila, bourbon and Tennessee whiskey is driving demand.

Spirits gained three-tenths of a point against beer in the market, now accounting for 33.6 percent of all alcohol sold. Beer has 49.3 percent of the market and wine 17.1 percent, according to the trade group.

David Ozgo, chief economist for the council, said he’s not surprised by the rebound.

“This is a classic pattern we see during a recovery,” he said. “We may be recession resilient, but we’re not recession safe.”

The fact the super-premium spirit segment – top-shelf brands – grew by 8.9 percent, more than any other, is an indicator consumers believe the economy is picking up, Ozgo said.

“During a recession, we see consumers go to value brands,” he said, adding that even though the employment rate is still lagging, people are feeling more confident and are willing to spend.

Vodka is the industry’s top performer, with bourbon, Tennessee whiskey and rum trailing behind.