Trust The Trends
Earlier this year the team our team shared our contrarian thoughts on the benefits of the US Whiskey segment’s steady growth over the past 30 years. Since that article, we’ve all read about the impact of RTDs, THC-infused drinks, and the new “Zobriety of GenZ". In addition, we’re now reading about how industry hasn’t really sold more bottles than in previous years.
Well, we’re back to again argue that the industry is facing headwinds, as it has for decades in different forms, but that craft beverage brands should stick to the task of scaling their business and focus on winning with both the trade and its target consumers. Specifically, targeting those consumers who drink Super Premium + brands and are willing to pay for distinct, authentic experiences in alcohol and beyond.
When looking at the 2000 to 2022 period, it is clear that the shift in Price Segment shares was consumer led and deliberate. In the following chart, we see definitive p
- Using the 80/20 rule, 86% of volume in 2000 was in the lower-priced Value and Standard price bands. 22 years later, 81% of bourbon volume sits in the Standard, Premium and Super-Premium price bands, with Standard price brands having lost 15 share points since 2000.
- Said another way, in 2000, the “center of gravity” for bourbon pricing was in the mid-teens. By 2022, the “center of gravity” pricing had shifted to closer to the mid-twenties.
- Said another way, in 2000, the “center of gravity” for bourbon pricing was in the mid-teens. By 2022, the “center of gravity” pricing had shifted to closer to the mid-twenties.
To put a finer point on this argument, while Value and Standard price segments are still nearly 50% of the market, higher priced segments have gained significant share over these past two decades:
Granted, the bourbon whiskey industry is facing headwinds, but as we’ve stated before, we put a lot of trust in long-term trends in an industry that is practically as old as our nation. BEP again reiterates that craft owners should “Lean into the Wind!”
- “Strategy”. It’s now more important than ever – it’s imperative to define it, articulate it, and stick to it for your craft brand. It’s the reason high end spirits drinkers are willing to pay super-premium + pricing!
- “Eat the apple one bite at a time” - short-term objectives can help you achieve your long- term strategy. Make informed & purposeful incremental steps each day towards that greater goal
- “Innovate”. The Chinese language uses two characters for crisis: Danger and Opportunity. The time to take smart, strategic risks to protect and grow your brand is now!
- “Understand & embrace the change”. Having an appreciation for the goals and strategies of wholesalers and retailers will better prepare you to find/create alignments. Leveraging your network relationships is critical!
- “Have Confidence”. If you’ve done your homework up front, sticking to a workable strategy will pay dividends, as the industry inevitably returns to growth.
- Having all the answers can feel like a daunting goal. We believe starting with the right questions is the better way forward.
- BEP’s partners have weathered the ups and downs in alcohol beverages for 30 years and can help your business – it can start with just a call. For more information, take a look at our website, Brand Elixir Partnership.com
Having all the answers can feel like a daunting goal. We believe starting with the right questions is the better way forward.
Our partners have weathered the ups and downs in alcohol beverages for 30 years and can help your business – it can start with just a call. For more information, take a look at our website
