10 Years of Premiumization In Spirits
This week, there was a lot of press around premiumization in various spirits categories. So we decided to see how "premium" each category was today and how it's evolved. Take a look below:
How to read: The bar and 1st row of the table shows what % of category volumes are in Premium+ price segments. The 2nd row shows how that mix has changed vs 10 years ago. The 3rd row is a 10-year CAGR of Premium+ volumes.
A few reflections on the data:
- Tequila's transformation is remarkable. 20 years ago, few would've believed how "Premium" Tequila would become. The industry has done an impressive job shifting perceptions, so what's the next Tequila-level breakout?
- Brandy and Gin still show significant upside for premiumization. Cordials and Canadian Whisky also have room to move up. Consumers want to trade up; it's just a matter of when.
- A note on Gin: Gin's shift toward premium the past 10 years is driven more by a decline in Value Gin than by explosive growth in Premium offerings, although Premium+ is growing.
Taking a long view like this is helpful. Premiumization isn't linear, and this industry is cyclical. Tequila had its moment, and RTDs are having their moment. What's next?
Author
Matt is an experienced Beverage Alcohol Consultant who helps emerging beverage alcohol brands with growth strategy, M&A diligence, consumer insights, and fundraising. He is also an active CPG angel investor.