In the latest 12 weeks to August 22, BeverageTrak data reveals the average price for spirits has increased by +6% vs the same period in 2021, with all categories increasing between +4% and +9%. Brandy and Cordials saw the largest increase at +9% and +6% respectively, while Rum and Vodka the lowest at +4% and +5% respectively.
CGA’s BeverageTrak service combines powerful datasets to provide an ultra-granular view of how Beer, Wine and Spirits are being ordered and distributed across the US, offering an unprecedented view of the market with unparalleled transparency.
Although the average price changes varied across each category, the rank of each category remained the same in both 2021 and 2022 (from most to least expensive: Cognac, Whiskey, Tequila, Gin, Cordials, Brandy, Rum).
Grouping sales into price bands (low, mid, and high) and recording the average velocity for each, CGA explores how each category performs in each band to determine where opportunity lies. For example, compared to 2021, Brandy and Gin performed better in the mid price band (+36% and +16% respectively) while Tequila performed much better in the high price band (+21%). In the low price band, Cognac had its largest increase in velocity at +10%. Understanding how certain products perform across different price bands can provide invaluable insights to suppliers and distributers alike.
Of course, this can vary throughout the different On Premise channels, so at a more granular level, how have Spirits categories performed across different outlet types?
On average, drinking outlets fared better vs 2021 than eating outlets across Spirits sales, particularly in the mid price band where all but Cognac and Whiskey saw positive trends. Interestingly, while drinking outlets recorded higher Spirits sale velocities than eating outlets across almost all categories and price bands in 2022, Gin was the one outlier earning more for eating outlets compared to drinks-led venues. The most lucrative price band for Gin is high although the largest growth was seen in the mid price band (up +15% from 2021).
Delving further into the subsegments, drinking outlets earn more from Whiskey than the other spirit categories – in Premium bars, the mid price band performs best on average ($8,405 per outlet and a +63% improvement on 2021), while neighbourhood bars earn more on the low price band ($4,690 per outlet and +17% on 2021).
For eating-led outlets in the last 12 weeks, the highest velocity is derived from Vodka. Fine dining over-indexes in all price bands, with high being both the most lucrative ($6,557 on average per outlet) and having the largest growth vs 2021 (+28%). Polished casual restaurants also over-index across all price bands in the Vodka category, however the mid price range is where the highest velocity is recorded ($3,698 on average per outlet and a 3% increase from 2021).
When exploring Beer, the average price increases echoes Spirits’ performance at +6%. At the higher end, Craft, Super Domestic Premium and Below Premium categories had an increase of +8% while at the lower end, Import had an increase of +3% and Flavoured Malt Beverages remained flat versus 2021.
The ranking from most to least expensive also remained the same, with Malt Liquor topping the list followed by Craft, Cider, Import, Hard Seltzer, Domestic Super Premium, Flavoured Malt Beverage, Domestic Premium, Below Premium.
In the mid price band, Import has overtaken Domestic Premium as the most lucrative in the Beer categories with a 33% increase in velocity versus 2021. This is also the case in food-led outlets, where mid-priced Imports command the highest velocity ($2,792 on average), however in drinks-led outlets mid and low priced Domestic Premium beers overtake at $9,209 and $6,867 respectively.
Craft Beers performed particularly well in the mid price band in Polished Casual restaurants for the last 12 weeks ($4,232 average velocity) followed by low priced Hard Seltzers ($2,216). Domestic Premium’s dominance is mainly in Sports and Neighbourhood Bars, whereas Imports (particularly in the high price band) earned Irish Pubs and Premium Nightclubs the most velocity.
Matthew Crompton, Regional Director – North America, said “On Premise businesses are facing a number of challenges in the market and while visitation levels remain high, it’s crucial that suppliers and distributors are understanding shifts in consumer consumption, the factors driving their drinks choice and the impact this has on performance of brands across price bands. Pricing Analytics helps suppliers spot trends over time and identify the areas for opportunity that may be missed otherwise.”
CGA by NielsenIQ’s Pricing Analytics, powered by BeverageTrak, can examine the price and velocity of brands and products across all markets and channels informing suppliers where and at what price range their products are under or overperforming compared to their competitors.
For more information on how Pricing analytics can support your brand and On Premise strategies, email Matthew.crompton@cgastrategy.com.
