GROWTH BRANDS

499gb1BEVERAGE DYNAMICS identifies the fastest-growing brands of wine, beer and spirits in the beverage alcohol industry.

By Richard Brandes

Along with the rest of the U.S. economy, the beverage alcohol industry is growing at a healthy pace. In 1998, all segments of the industry — wine, beer and spirits — showed volume and dollar increases, according to the Adams Handbook Advance 1999.

Total retail dollars from the sale of wine, beer and distilled spirits surged 4.5% in 1998, from $103 billion in 1997, to $108 billion last year. Wine retail sales grew almost 6% to about $14.5 billion; spirits generated sales of $34 billion, gaining 1.6%; and beer sales were almost $60 billion, up approximately 6.1%.499gb

These retail dollar sales underline not only volume increases across all segments of the industry but also speak for consumption trends favoring higher-end products. Generally speaking, distilled spirits products such as single malt Scotch, cognac, imported vodka and other superpremium spirits gained sales. Overall, total spirits consumption increased 1.8% in 1998, reaching a total of 141.2 million 9-liter cases. Most of the growth was concentrated among the non-whiskeys, though Irish whiskey (+6.5%), single malt Scotch (+5.1%) and straight American whiskey (+0.8%) showed increases. The top performers included tequila (+10.1%), rum (+7%) brandy & cognac (+3.1%), vodka (+2.3%), prepared cocktails (+5.1%) and cordials and liqueurs (+2.3%).

Once again, wine consumption continued to flourish, with an overall increase of 3.5% in 1998 compared to 1997. Table wine gave the most impressive performance, now accounting for 86.7% of the U.S. wine market (which had an estimated 4.7% increase last year). Significantly, many of the top wine performers were premium varietals, which have shown dramatic growth over the past few years.

The beer industry also posted volume gains, registering a 0.9% increase (+23 million cases), with total U.S. beer consumption, now at 2.66 billion 2.25-gallon cases. Again, the higher-priced imports had a significant rise, up 15.7%. And light beers also gained ground, with the entire segment posting a 3.5% sales gain.

Meanwhile, there are products in every category and at every price point that, for a variety of reasons, have either fallen behind or outpaced their respective competitors. And although identifying consumption trends is helpful, actual brand activity generates profits. Thus, the rationale behind “Growth Brands,” Beverage Dynamic‘s annual report based on the latest industry results to highlight those brands that have demonstrated noteworthy growth over the past few years.

Of the four categories of Growth Brands, Fast Track carries the most demanding set of criteria. Among wines and spirits, these are brands whose sales exceeded 100,000 9-liter cases in 1998, while also demonstrating double-digit growth over each of the past four years. Domestic beers qualified for the Fast Track designation by exceeding 9 million 2.25-gallon cases in 1998 with double-digit growth over each of the past four years. Fast Track’s imported beers met the same criteria, with their sales having exceeded 2 million 2.25-gallon cases in 1998. All Fast Track Brands must have at least a five-year history.

Other brands that have shown significant growth over the past few years, but have not yet been on the market for five years, have been designated as Rising Stars.

In addition, to highlight traditionally top-selling brands that have consistently grown over the past five years, we created an Established Growth Brands category. Because many of these brands are already operating from huge sales bases, their percentage gains were often modest relative to their overall case volume, even though these brands have had substantial sales increases and are often leaders among their respective segments.

Finally, there are brands that have had one or two years of sales declines since 1994, but have bounced back over the past few years to have a positive impact on the marketplace. Beverage Dynamics termed these products Comeback Brands, and they include several of the best-selling brands of wine, beer and spirits in the industry.

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