The US Spirits & Beer Industry; Craft
Beer & Spirits Heading to America
Overview of Beverage Alcohol in the US
Beverage alcohol accounts for 15% of the total beverages market in the US market and includes beer,
wine and spirits. In the past five years, both wine and spirits have seen growth in consumption;
however a decline was seen in beer consumption. Domestically produced beverage alcohol
dominates the market in all three categories, with spirits having the highest proportion of imported
product consumed at 40%. Volume wise, the majority of alcoholic beverages are sold through offpremise compared to on-premise channels, value wise these channels have a similar value. Further
information on market value, category growth and consumption can be found in the full report.
Beer
Although overall beer consumption has declined in recent years, super premium/craft beers have
seen substantial growth and gained market share. Imported beer also saw a slight increase in market
share while overall premium beer saw a decrease. In 2013, 184 new beer brands entered the US
market lead by ales, FMBs and stout. Over half of the imported beer consumed originated from North
America rather than just the US while the remainder was mostly imported from European countries.
A comprehensive list of new entrants to the market and leading import brands can be found in the
full report.
Spirits
Spirits consumption is currently at an all-time high in the US following 10 years of growth. Value
spirits is the only segment of the spirits market to be experiencing a decline in consumption, with
premium, super-premium, and ultra-premium all showing growth. Flavoured spirits, which include
whiskey, vodka and rum, have grown at three times the rate of the overall category. Jameson is the
market leader in the Irish whiskey category, and just four brands supply 93% of the market. Just six
states consume 50% of the Irish whiskey exported to the US, and consumption in each of these states
experienced double digit growth in 2013. There were 361 new spirit brands introduced to the US
market in 2013, this was primarily new vodka and whiskey brands. An analysis of other flavoured
spirits can be found in the full report, including an overview of new entrants and consumption by
state.
Distribution System
Overview
The United States repealed prohibition in 1933 and in an effort to retain control on the production
and distribution of alcohol, introduced rules and regulations that are still in place today. There are 32
“open states” where privately owned entities operate through a three tier system, and 17 “control
states” where the state purchases all alcohol and controls it’s’ sale. There is a three tier system in
place which prevents a company owning a stake in more than one of the three tiers; Producer,
Distributor, and Retailer. Only the retailer is permitted to sell alcohol to the consumer. A list of
control states, an overview of the three tier system and a background to the history of the sale of
alcohol in the US can be found in the full report.
Gaining Access
To gain access to the US market, brands must go through an approval process to attain relevant
licences and permits. Most states require companies to have a Federal Certificate of Label Approval
(COLA) and approval before shipping. This process can take up to 16 weeks before product can be
shipped. Regulations and requirements vary from state to state. Essentially each state should be
thought of as a separate market. Due to logistical issues and import tariffs, it is essential that
companies looking to export alcoholic beverages to the US analyse the financial implications prior to
shipping product. Taxes differ by state and margins can vary. For a review of the approval process
and pricing examples, please see full report.
Forecasting Demand and Trends
Consumer profiles and demands will continue to change and grow in the coming ten years which will
mean the distribution chain currently in place will have to adapt to meet the consumers’ demands.
Demand for beer, wine and spirits is expected to grow in the next ten years and the increase in
distributors and retailers will continue to grow to meet this demand. The larger brewing companies
are taking notice of the craft beer trend and are capitalising on this by investing in craft breweries
and offering a means of distribution to smaller brewers. Wineries are tending to focus on spirits and
non-alcoholic beverages, while spirits producers are focusing on expanding their portfolios. For more
distribution and brand trends, please reference the full report. The report also includes a more
focused look at trends in the beer, wine and spirits sector.
Navigating the Market
The US market is highly competitive and working closely with all three tiers of the distribution chain is
essential to getting your product on the shelf and off again. To be successful, a brand needs to have a
good product, a reliable logistics mechanism, a clear marketing and sales plan, and must be priced
appropriately. Consideration should be given to both long and short term objectives, investment of
time, money and personnel, and the scale of the project. For a comprehensive look at the do’s and
don’ts see full report.
To get access to the full report, please email info@bordbia.ie