News: Quick Takes

U.S. drinkers buying more spirits, which is good news for the state monopoly

People in the U.S. are drinking less alcohol overall, but they are buying more spirits.
But what’s good news for the N.C. Alcoholic Beverage Control Commission isn’t necessarily good news for North Carolina consumers, who can’t always buy what they want and oftentimes pay more for it.

Despite a dip in total alcohol consumption, U.S. drinkers bought more than 230 million nine-liter cases of distilled spirits in 2018 — a 1.9 percent increase on the previous year, according to preliminary data by the IWSR, which on its website refers to itself as the largest database on the beverage alcohol market.

Industry website The Spirits Business wrote about the IWSR report last week.

Total alcohol volume in the U.S. declined by 0.8 percent last year to 3.345 billion nine-liter cases. Spirits sales were driven up by whiskey, which grew by 4.1 percent, and tequila, which increased 8.5 percent.

“The figures released by the IWSR showed wine consumption grew by 0.4 percent while beer, which at 2.62 billion nine-liter cases has long dominated the U.S. alcohol market, was down by 1.5 percent. A year of innovations in cider and mixed drinks helped reverse the declines of 2017, with the categories posting increases of 4.1 percent and 6.1 percent respectively,” writes The Spirits Business.

North Carolina is one of 17 control states in the U.S., meaning the state has a monopoly on liquor storage, distribution, sales, and enforcement. The IWSR report looked at nationwide trends and doesn’t break down consumption according to states, so it’s difficult to determine how much beer and wine North Carolinians are drinking.

In 2008, as CJ reported last week, the state spirits warehouse took in about 5 million cases of liquor. By 2016, that number had increased to more than 6 million. No state ABC stores closed in 2018, but four new stores opened, bringing the number of ABC stores in North Carolina to about 435. Three counties or municipalities approved the sale of mixed beverages.

In the report, the ABC boasts: “The fiscal year 2018 marks the [ABC commission’s] third consecutive record setting year for 10-digit sales, where retail sales surged and sales to restaurants and other businesses with mixed beverage permits increased over the prior year. The billion-dollar ABC revenue resulted in an all-time high transfer of money into the General Fund for use by the N.C. General Assembly.”

Nationwide, Cognac and Armagnac volumes were up by 5.6 percent, and brandy rose by 1.7 percent. The largest percentage gain was witnessed by mezcal, which rose by 32.4 percent from its 2017 sales of 261,000 nine-liter cases.

Brandy Rand, IWSR’s U.S. president and global chief marketing officer, says: “Spirits and wine showed slight growth in 2018, but those category increases weren’t as high as previous years. It’s clear that Americans are drinking less overall, which is likely a result of the continued trend toward health and wellness.

“We’ve also seen for some time now that consumers aren’t necessarily loyal to just one category, which leads to less volume for individual brands. Also, the aging baby boomer population, the largest group of legal drinking age consumers, is contributing to slowed growth, as well.”