Cheers! Spirits like gin, vodka, overtake beer’s U.S. market share

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NEW YORK (Reuters) – Vodka shot, anyone? Spirits like whiskey, cognac and tequila, a celebrity favorite, have surpassed beer’s U.S. market share for the first time due to price hikes and high-end cocktail trends, according to the Distilled Spirits Council of the United States.

Drinkers last year bought more liquor such as Diageo (LON:DGE) Plc’s Johnnie Walker Red scotch and Casamigos tequila, co-founded by Hollywood actor George Clooney, helping hard alcohol overtake beer’s market share for the first time, the trade group said.

U.S. sales for spirits totaled $37.58 billion last year, while beers like Anheuser-Busch inbev SA’s Bud Lite tallied $37.46 billion, according to data compiled by the Distilled Spirits Council. Spirits’ market share was 42.1%, while beer’s was 41.9%, according to the data.

Tequila and ready-to-drink canned cocktails including Constellation Brands Inc (NYSE:STZ)’s Fresca vodka spritz were among the fastest-growing types of spirits, the Distilled Spirits Council said. Vodka is the largest by sales.

“The ‘premiumization’ trend, where people look at distilled spirits as an affordable luxury, is affirmed by these numbers,” said Chris Swonger, CEO of the Distilled Spirits Council.

He added that happy hours conducted by video chat at home during the pandemic led to more sales of spirits.

Sales of liquor at restaurants and bars, however, have yet to recover to pre-pandemic levels, the data from the trade group shows.

Swonger pinned the slow recovery on hybrid work or flexible arrangements that blend in-office and remote work.

“Downtowns will be full on a Tuesday, Wednesday, Thursday, not on Monday or Friday,” he said. “There are less Friday after-work drinks.”