Spirits Industry Update Week of August 2nd
Spotlight: Spirit giants continue to see solid growth.
Two behemoths in the spirits industry, Diageo and Campari Group, have continued to post strong results in the face of a global pandemic.
For its fiscal year ended June, Diageo saw overall sales increase 16%, with operating profit up 18% over the same period. Much of the growth can be attributed to the North American market, with sales in this market up 20% alone. In particular, tequila sales in the US have been a driving force for the growth – Diageo has seen its US tequila category grow by 87% YOY, lead by Don Julio and Casamigos.
Campari Group also posted strong results for its first fiscal half ended June. The company’s overall net sales were up 37% for the period, with sales in the US market rising 29%. Campari Group’s Espolon tequila is up 50% YOY, as tequila continues its surge in popularity across the US market. Other brands in the Campari Group portfolio include Sky Vodka, Grand Marnier and Wild Turkey Bourbon.
The wine industry in the US is expected to suffer a decline in volume this year after posting annual gains every year for the past twenty-seven years. From 2000-2010, the American wine market averaged 3% annual growth. From 2010-2020, the annual average growth was less than 1%. For 2021, the American wine market is expected to decline by .5%.
The decrease comes as spirits and malt beverages (such as hard seltzer) continue to surge in popularity and steal market share from wine. Currently, Barefoot Cellars is the only wine brand with sales topping $1 billion in the US.