Minneapolis, Minn., (March 10, 2023) The Beverage Alcohol industry faced many challenges in 2022. Economic uncertainty continued with fears of a recession, continued supply chain instability, ingredient shortages, and increasing inflation. However, the overall performance of the industry remained resilient with continued volume growth in distilled spirits. Consumer demand was generally strong in 2022, although the wine and beer categories faced volume consumption challenges (both down at least -1.1%).
According to the Beverage Information Group’s just-released 2023 Industry Overview, the Beverage Alcohol industry had segments that posted growth in 2022. Values for the industry remained on the rise as the premiumization (or trading up to higher-priced, often higher-quality products) trend kept up in 2022, still driving all segments of beverage alcohol, most notably in distilled spirits. Strong interest in drinking premium/high-end products at home and at on-premise establishments as they re-opened continued generating growth, and the trend towards premiumization appears to show no signs of slowing. Consumers are willing to pay more to know that they are receiving premium ingredients and products that come with a story that highlights the heritage and authenticity of the brand.
Distilled spirits were the bright spot for adult beverages, gaining 6 million 9-liter cases vs 2021 and achieved its 25th consecutive year of steady volume growth. Tequila and RTD’s both had double digit growth helping the spirits category to drive growth for the industry. Spirits ready-to-drink products continue to be very popular with consumers, particularly the younger segments, looking for convenient quality cocktails made with premium ingredients and real spirits. While spirits RTDs remain small, they represent a growing portion of the overall RTD market.
The wine market has had an especially difficult time connecting with younger, multicultural consumers. Wine has lost some of its relevance among these drinkers. Looking at current trends, younger LDA consumers are less likely than older consumers to think of wine as “the” beverage to bring to a party. This has prompted producers to rethink their branding. Even the most established and recognizable brands are continuing to update both their products and their marketing to attract new consumers. Table wine drives the category despite slipping in volume over the last 3 years, but thankfully sparkling is consistently increasing, helping to offset the table wine decline. With domestic table wine driving the volume, domestic suppliers will need to lead changes for growth. The challenges for wine are real, but with the right approach the category can course correct.
In 2022, the total beer category ceded the modest volume consumption gain attained in 2021. Prior year’s growth was driven by hard seltzer and imports, but with hard seltzer sales shifting from double digit growth to a decline, as well as lower light lager & craft beer volume, the whole category took a dip in 2022. Positive trends in the beer category were driven primarily by gains in the flavored malt beverages, Super Premium and Imports categories. Imports had the highest volume growth at 3.4% vs YAG and are now almost 20% of the total beer category.
Going forward, consumers continue to approach the spirits, wine, and beer categories based on how they believe the beverage option they select can enrich a specific occasion. They are also increasingly looking for immersive brand experiences that allow them the opportunity to become more emotionally involved with alcohol brands.
About the Industry Overview
The 2023 Industry Overview details the year’s first look of the beverage alcohol industry, including preliminary projections of 2022 volume consumption data and trends in the distilled spirits, wine and beer categories.