Spirits revenue in U.S. to rise 3% in 2024 as consumers see affordable luxury

Spirits revenue in the U.S. is slated to increase ~3% in 2024 compared to this year as liquor company CEOs say that despite concerns over inflationary impacts on consumer spending, drinkers still see spirits as an affordable luxury.

U.S. sales of spirits is expected to reach $54.9B in 2024, according to Statista. From 2023 to 2028, revenue is expecgted to increase at a 2.85% compound growth rate.

Based on sales, vodka and tequila are projected to be the two highest selling spirits in 2024, at, respectively, $12.9B and $11B. Whiskey came in thurd at $10.9B.

The biggest sales growth between 2023 and 2024 is seen with brandy, tequila and vodka with increases of $400M each projected.

Statista noted that customers are gravitating more to premium and craft spirits, as well as flavored spirits such as fruit-infused vodkas and botanical gins.

“The United States has a strong economy and a high disposable income, which has contributed to increased consumer spending on spirits,” the Statista report says. “In addition, the United States has a well-developed distribution network, with a wide range of retail outlets and online platforms available for consumers to purchase spirits.”

Although inflation is expected to negatively impact costs for the spirits industry, top execs don’t seem to be that concerned.

“We are still seeing consumer demand for premium and super-premium spirits and expect consumer demand for our brands to continue to reflect a normalisation back to our more historical trends, particularly in the US,” Brown-Forman (NYSE:BF.A)(NYSE:BF.B) CEO Lawson Whiting recently told JustDrinks.

“We remain cautiously optimistic about the outlook especially for the second half of 2024 due to a more positive outlook in the general consumer environment driven by lower inflation rates and stronger recovery in emerging markets. We think that both will be driving the return to normalised growth in premium spirits in the coming year,” added Mast-Jaegermeister CEO Michael Volke.

Diageo (NYSE:DEO) is looking toward 2024 more conservatively. In its last earnings report in November, the spirits giant said that while momentum is continuing in four of five regions, it warned of a materially weaker performance outlook in Latin America and Caribbean.

Earlier this year, IWSR, a firm that monitors the global beverage alcohol market, said that the US and China are losing their status as key growth volume drivers. “Instead, India, Mexico and Brazil stand out as the key volume growth markets over the next five years,” IWSR said.

Other spirits stocks: Constellation Brands (NYSE:STZ), MGP Ingredients (MGPI), and Pernod Ricard. (OTCPK:PRNDY)

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