U.S. beverage alcohol volumes decline again in 2017, beer category declines substantially

You, sir, are in decline.

Over the last 40 years, IWSR has built up the world’s largest database on the beverage alcohol market. It claims to understand the market, category and brand performances of products in 157 countries across the world using local market input. Occasionally, IWSR releases market reports, and occasionally we run those market reports because we find them interesting and insightful. Here’s one right now!

For the third year in a row total beverage alcohol consumption decreased -0.7 percent in the United States in 2017 due to a struggling beer category, according to the just-released IWSR US Beverage Alcohol Review (US BAR) database. Though wine and spirits experienced growth of 1 percent (3.5M 9-liter cases) and 2 percent (4.8M 9-liter cases) respectively, it was not enough to offset a massive decline in beer of 29.4M 9-liter cases (-1.1 percent), which holds the majority share of alcohol volume.

Continued pressure on domestic and light beer overshadowed growth in the import and craft sector. Despite total beverage alcohol volume loss, industry value continues to increase as consumers trade up to more quality products. The U.S. alcohol industry is valued at $157.7 billion, up 1.6 percent from the prior year. This has been led by spirits, most notably tequila (+7.3 percent), cognac (+9.3 percent) and U.S. whiskey (+5.5 percent). Both still wine (+0.9 percent) and sparkling wine (+4.3 percent) have enjoyed continued momentum as consumers gravitate toward alternative packaging and view wine as an everyday drinking occasion.

Key U.S. consumption trends in 2017:

62 percent of the adult population consumed alcoholic beverages, down from 65 percent the year prior. People are drinking less, largely due to health concerns and a prevalent wellness trend affecting all social sectors.
The number of domestic wineries (12,335), breweries (8,863) and distilleries (2,531) increased by a combined 14 percent in 2017, which affects traditional on- and off-premise sales channels as consumers visit and make on-site purchases.
While total retail sales grew 4.4 percent from 2016, total e-commerce sales increased by 16 percent from 2016 to account for 8.9 percent of total retail sales. Through the importance of consumer convenience, e-commerce sales of beverage alcohol have become a significant sales driver.
Cross-category consumption and trend-driven innovation has led to a variety of hybrid products capitalizing on everything from rosé to barrel-ageing to non-alcoholic.