State of the Alcohol Beverage Industry 2015: Small Is Big

The early results from 2014 tell a very clear story about the dynamics at play in the alcohol industry: The small are getting bigger, and the big, for the most part, aren’t.

  • Beer held its majority share of total alcohol volume, but another year of overall decline resulted in beer again ceding some share to spirits and wine, both of which posted gains for the year.
  • The largest categories in beer—domestic light and regular—both shed volume, while two of the smaller categories—craft beer and hard cider—each posted double-digit increases.
  • Vodka continues to hold one-third of total spirits volume. Its momentum improved in 2014, but its pace was eclipsed by several smaller categories, including Irish whiskey, cordials/liqueurs and straight American whiskey.
  • Table wine dominates the wine market, and its 2014 growth improved over 2013, but it was again markedly outpaced by the considerably smaller sparkling wine category.
  • Many of the largest brands struggled and some even stumbled in 2014. Early analysis reveals accelerated growth rates for many smaller brands while the well-established labels, whose performance often influences an entire category’s trend, lost volume. In American whiskey and vodka, for example, strong momentum is occurring beyond the leading brands.

These early results confirm that craft, artisan and small-batch are far from a fad in any alcohol category, the American palate continues to evolve, and consumers are willing and eager to engage with new and emerging styles, products, brands, flavors and formulations. All this puts a new spin on brand and even category loyalty going forward, cranking up competitive intensity for marketers.

In addition, it challenges operators to weigh the value of high-volume categories and brands against up-and-comers when determining what will earn coveted space on back bar and retail shelves and slots on the promotional calendar. Successfully striking that balance may well be the key to success in 2015 and beyond.

We will share more insights, information and analysis during our Trends in Adult Beverage: Outlook 2015 & Beyond webinar on Thursday, March 26, which is open to all industry pros, from suppliers to operators.

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Donna Hood Crecca

A veteran of the foodservice industry, Donna Hood Crecca leads the firm’s Convenience Store Practice and is active in its Adult Beverage Practice. She develops research-based insights and recommendations for leading and emerging supplier and operator companies to enhance their go-to-market and product development programs and strategies.

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