‘Status spirits’ and premium wines to fair well in lockdown

Super-premium “status spirits” could prove popular with those consumers who have cash to spare and more time on their hands amid the coronavirus lockdown, according to new figures.

So-called “status spirits” – those that retail for US$100 per bottle or more, are growing “significantly ahead” of the overall spirits market, new data from IWSR has revealed.

The IWSR Status Spirits Strategic Study has published a report looking at the premium spirits segment (excluding Baijiu), and found that it was worth US$8.3 billion, and grew at a compound annual growth rate (CAGR) of 7% from 2014 to 2018. This is significantly ahead of the total global spirits market at 2% value.

This growth at the upper end of the spirits market was driven largely by Cognac and Scotch whisky, according to researchers.

“Though we conducted our study prior to the current COVID-19 situation, when we look at similar past events, such as SARS and the 2008 financial crisis, luxury goods and status spirits in particular have always recovered to previous levels,” Mark Meek, CEO at IWSR Drinks Market Analysis, said.

IWSR data shows that between 2008 and 2012, global prestige-plus spirits (generally $100+) grew 82% in volume, and almost 230% in value, which the IWSR claims “reinforces the resilience of high-end spirits after economic challenges.”

While the IWSR report is trying to forecast how luxury spirits sales will perform based on crises past, some distillers and wineries have said their more expensive products are already fairing well during the current lockdown. Jgor Marini, regional manager of Italian wine estate Castello Banfi, told the drinks business earlier this month the business has seen “appellation wines performing very well.”

“People want to know they can trust the quality of the product,” Marini said, adding that sales if Chianti Classico wines, “which are already well known to consumers,” stood out more than most.

George Grant, sales director for Scotch whisky distillery Glenfarclas, said he’s noticed a similar affect across wine and spirits, adding that although the company’s overall sales have been mixed thanks to logistics issues, there’s been an uptick in sales of its Family Cask range. The bottles can cost anywhere between a new hundred pounds to more than £9,000.

“The few distributors I’ve spoken to think the same,” he told db. “People have got more time on their hands and probably aren’t going to get a holiday this year. They’re thinking “bugger that I will spend that.”

He said this is also true of the other producers in brand owner Pol Roger’s portfolio, “it’s the higher end things that are doing well.”

IWSR found the majority of value came from the US$100 to US$250 range, but the US$250 to US$1,000 bracket is expected to grow fastest.

Meek added the research shows the majority of status spirits are “most often sold in fine wine and spirits retail stores and via e-commerce – more so than in bars and restaurants – which bodes well for these products in this current climate.”