By Josh Jacobs, Co-Founder and CEO, Speakeasy Co.
Here at Speakeasy, we're always interested in relevant trends in the alcohol space, specifically when it comes to consumer preferences and insights. One trend we've noticed lately - one that cannot be ignored as it's been in multiple headlines - is the exploding demand for premium alcohol. And, these growth statistics are not just from during the pandemic, but even when comparing where we stand today from pre-pandemic times. In fact, consumers are even drinking less overall, but when they do drink, they're turning to premium spirits, as noted in this article from Beverage Daily. This especially applies to Millennials and Gen Zers. The article states that 47% of American adults are trying to reduce their alcohol consumption, and that 66% of Millennials are doing the same, but that premium spirits brands are forecasted to increase their market share to 13%.
While this applies to various types of alcohol, we can even specifically call out whisky in particular. In an article by The Spirits Business, it has been noted that the global whisky market will increase at a compounded annual growth rate of six percent between 2021 and 2031, up from four percent from 2016-2020.
In particular, Americans seem to be most interested in premium spirits, both with whisky, and across the board.
One can look to LVMH specifically, one of the leading luxury houses, which owns many premium liquor brands, and has seen a significant increase in sales of these brands over the last number of years. In fact, the numbers are so impressive that the annual growth rate is 17.7 percent, as compared to the 2.5 percent rate seen across all spirit brands. A growth rate of 17.7 percent is typically only seen in early stage companies that are experiencing fast and furious growth.
Ironically, many companies in retail right now are experiencing supply and logistics hold-ups due to COVID-related delays and challenges. Despite this, LVMH's brands have continued to see climbing sales.
One might wonder why premium spirit brands are so desirable right now, and we can certainly speculate as to why. If we look to the global financial crisis that began in 2008, those who could no longer afford designer brands would turn to less expensive items within those brands. For example, consumers might purchase a lipstick instead of a handbag, as noted in this article from The Spirits Business. Consumers still care about quality, and want to treat themselves to something luxurious, especially when times are tough. This sparks a change in spending habits - from excess to streamlined and thoughtful.
As newfound leaders in the alcohol industry at Speakeasy, we are pleased to see an appreciation and desire for high quality spirits, and are supporting this industry in our own way, as can be seen with our recent partnership with Mast-Jägermeister to bring their premium line extension Jägermeister Manifest directly to consumers via our platform as well as with our recent launch of Tesla Tequila
