US alcohol consumption posts biggest increase since 2002, fuelled by at home drinking
Alcohol consumption in the US increased by 2% last year, largely fuelled by the increase in home drinking resulting from the Covid pandemic.
This is according to IWSR Drinks Market Analysis, which revealed that the upward trend is set to continue for the rest of the year, with year to date volume sales in the US still up on 2019. By the end of 2021 the ISWR has forecast that US alcohol volume sales will be up by 3.8% year on year, with value sales up by 5.5%. However, a more restrained growth rate has been predicted for the longer term, up by 0.5% volume and 2.8% value CAGR in the five year period between 2020 – 2025.
“A key driver of US beverage alcohol consumption is flavour. Flavoured subcategories – from beer to vodka to US whiskey – are significantly outperforming traditional non-flavoured sub-categories,” said Brand Rand, IWSR’s COO of the Americas. “Flavour is also the top consumer driver of the fast-growing ready-to-drink (RTD) category, and that’s likely creating a halo effect on total alcohol as well,” Rand added.
Wine sales in the US meanwhile, inched up last year, at +0.7% by volume and +1.5% by value, reversing the volume declines seen in 2019. Both still and sparkling wine volumes were up +0.8%, but still wine is predicted to return to softening declines as RTDs and spirits grow at faster rates.
And with little to celebrate over the past year, sparkling wine still managed to post growth, with Prosecco (particularly rosé) going some way to compensating for declines in Champagne consumption.
Low-alcohol wine volumes more than doubled in 2020 in the US, with key brands entering the category offering lower calorie and lower sugar options. Imported wine volumes grew more than domestic US wine (+2.5% vs +0.3%) from overseas markets including Chile, Italy, and New Zealand.
The biggest winner last year was RTDs, including hard seltzers, which is set to become the second-largest alcoholic drinks category in the US in volume terms, and bigger than the total US spirits market, and by the end of this year larger than total wine.
RTDs grew 62.3% by volume in 2020, led by hard seltzers which rocketed by 130%, now accounting for 56.7% share of the total RTD category in the US.
“Though the cocktail/long drink sub-category is still comparatively small by volume, the segment grew +52.7% in 2020 with canned cocktail growth spurred by on-premise closures and the on-premise pivot to ‘drinks to go,’ as well as more at-home consumption and outdoor socialization,” said Rand. The IWSR expects the RTD category to account for a 22% volume share of the total beverage alcohol by 2025, up from 9.6% share currently.
Beer continued to see annual volume declines with a -2.8% loss in the US in 2020, as gains in imported beer (+3.1%) weren’t enough to offset losses in 21.8%, from 20.6% in 2019 while no and low alcohol beer also proved a bright spot for the sector.
Photography: Kelsey Chance/Unsplash