Spirits Trends in the US and Western Europe

by Eve Resnick on September 22, 2008

in General

The Wine and Spirits Daily Newsletter of Megan Haverkorn reported lately on the latest trends in the US and Western Europe after a conference by Fortune Brands CEO Bruce Carbonari at the Bank of America Investment Conference:

“Trend #1: People are drinking more at home

“In the U.S. we’ve seen some changes,”said Bruce.”The market is built 20% on-premise (bars, restaurants, nightclubs) and 80% off-premise…slowdown in the on-premise side really driven by casual dining places where people would go out to dinner and have a cocktail or whatever else. We’ve seen an increase off-premise where people are going to the liquor stores and are buying spirits and having their occasions at home.”

Trend #2: Volume growth will slow this year

“It is a market that historically has grown 2-4% on a volume basis. Our take is that we’re going to be at the lower end of that growth this year, about 2-2.5% on a volume basis and there is still room for price.”

Trend #3: Value brands are picking up but premiums take the cake

“In the mix of the business we’ve also seen that we have had a heavy premiumization trend going on in ultra premium and premium. That has slowed down. When you look at premium, standard and value, value has picked up but premium is still growing faster than any other category, it’s just slowed down a little bit.”

Bruce said Western Europe is one of more concern. The company first saw problems it in Spain, which is a market that is 50% on premise and 50% off premise. He said “that business slowed dramatically in the second quarter.” The UK and Germany are a little bit softer and trends are slowing there as well, but like the U.S. they are more off-premise markets.”Our company is doing well in Germany and the UK in a more difficult economy but it is still growing,” he continued.”

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