The Distilled Spirits Council released its annual economic briefing today and one thing is clear: Bourbon’s still kicking ass and taking names.
The report noted American whiskey volume was up 6.4% to 23.2M cases (+1.4M cases) and revenues up 8.1% to $3.4B (+$252M).
Total spirits exports were $1.63 billion, a record.
Overall, supplier sales were up 4 percent, rising $1 billion to a total of $26.2 billion, while volumes rose 2.6 percent to 226 million cases, up 5.8 million cases from the prior year. These results reflect adult consumers’ ongoing taste for higher-end distilled spirits products across most categories.
“American spirits, particularly whiskeys, are the toast of the global cocktail scene,” said Council Senior Vice President for International Affairs Christine LoCascio. “International adult consumers are exploring more expensive U.S. spirits driven by their fascination with American whiskey’s heritage, as well as its mixability and versatility in cocktails.”
The top five growth markets by dollar value included the United Kingdom, up $55.7 million to $177.9 million or 45.6 percent; Germany, up $22.6 million to $123.5 million or 22.4 percent; Brazil, up $18.9 million to $29.1 million or 186.5 percent; France, up $15.7 million to $114.1 million or 16 percent; and Spain, up $14.5 million to $117.1 million or 14.1 percent. The Council has conducted export promotions in four of the five markets.
“Adult consumers, particularly millennials, continue to gravitate toward high-end and super premium spirits products,” said Council Chief Economist David Ozgo. “Companies are creating excitement in the marketplace with new products and new technologies to interact with spirits customers.”
Tax Reform Provides Equalizing Tax Cut to Distillers
In the public policy arena, landmark tax legislation at the federal level reduced the excise tax on spirits producers of all sizes for the first time since the Civil War. A two-year version of the Craft Beverage Modernization and Tax Reform Act, which equalizes the federal excise tax (FET) on spirits, beer and wine for the first 100,000 gallons for all producers, was included in the federal tax reform package. The Council estimates that the tax cut will be worth more than a half-billion dollars to distillers over the two-year period.
“This historic tax cut will enable distillers to invest back in their businesses and communities, generate jobs and support agriculture and growing whiskey tourism,” said Naasz, noting that the spirits sector supports 1.5 million hospitality jobs and $160 billion in economic activity. “Ensuring that the tax cut is continued beyond the two-year period will be a top legislative priority for the Council in the coming years.”
Naasz highlighted other policy victories in 2017 including:
- Sunday sales bans were lifted in Minnesota and Oklahoma, the 39th and 40th states to repeal their Blue Laws, generating an estimated $19.7 million annually;
- The defeat of tax threats in 18 states, saving the sector $321 million annually;
- The National Football League modernized its policy to accept league-wide spirits advertising, becoming the last major professional sports league to do so, and leveling the playing field with beer and wine; and
- In Boston, the city reversed its five-year beverage alcohol advertising ban on its mass transit system, gaining new revenue and marking another First Amendment win for distilled spirits.