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Value and ultra-premium spirits see growth in US market, as spending polarizes
US consumers’ spending on spirits has polarized in the on-trade over the last year, new stats have revealed, with both the value and ultra premium ends of the market seeing growth.
The data on US bars and restaurants from CGA by NIQ, shows that consumers are increasingly split between high-quality and value spirits brands in the on-trade, while the mid-range section of the market loses out.
Against a difficult backdrop, the total share of spirits in the value end of the market grew by 0.3 percentage points, taking its market share in volume terms to 17% in the year to October 2024. Meanwhile the ultra-premium spirits saw growth of 0.5 percentage points, taking the super-premium, Ultra and Luxury brands accounting for almost a quarter (24%) of volume sales.
However, the growth at the two extremities, is squeezing brands that sit in the middle, with mid-range spirits losing 0.5 percentage points (pp) in their share year-on-year.
Drilling down into the data, the On Premise Measurement Report showed the “significant growth potential” for ultra spirits brands as some consumers started to “spend more freely after a prolonged period of cost pressures”. In fine dining, this section accounts for 10.7% of all spirits volumes, while the highest growth has been seen in nightclubs, with an increase of share of 1.5 percentage points.
Geographically, New York saw the greatest uplift in volume terms in the ultra-premium segment, while Tequila and gin were the biggest winners.
CGA by NIQ’s vice president of the Americas, Matthew Crompton, noted the “widening of the gap in spending capabilities”, which had led to this polarisation.
“The rise of value brands has reduced spending in some channels, but other consumers’ desire for quality and difference is also generating share gain at the top end. This is also putting pressure on the middle ground of spirits, though there remains room for development in all tiers in 2025.” he said. “For suppliers and venues, the key to success is providing careful range and effective pricing ladders that give all consumers attractive entry points.”
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