U.S. Spirits Sales Flat in 2023

U.S. spirits producers turned in a flat performance in 2023, according to new economic data released today by the Distilled Spirits Council of the United States. While distilled spirits maintained their market share accounting for 42% of all beverage alcohol sales, sales only showed a 0.2% gain with a 1.2% gain in volume.

Irish, Single Malt Scotch whiskies, and Canadian whiskies took the largest hits, dropping year-over-year in revenue growth by 19.4%, 8.4%, and 5.9% respectively. This is significant, since the U.S. represents the largest market for Irish and Canadian whiskey sales and one of the largest markets for Single Malt Scotch sales.

“There is a disconnect this year for many categories between shipments and retail sales. If you look at some other Irish whiskey data from NABCA, which shows data for 17 control states, Irish whiskey retail sales are down by only 2.2%, said DISCUS chief economist Hasan Bakir, noting that the year was also a major one for depletions, or sales of existing inventory built up during the pandemic-fueled boom years of 2021 and 2022.

“The declines that are going on in the U.S. at this moment are not unique to Irish,” said Slane Irish Whiskey founder Alex Conyngham, who described the drop as a “short-term blip” on a Zoom call with spirits writers Wednesday afternoon. “This is also affecting other categories as well. I actually think it has more to do with how changes in the U.S. market are working…we’re all affected by the cost of borrowing, paying for inventory and holding stock is costing more money, and as a result of that, I think people are running leaner inventories and what’s actually happening is that there’s quite a lot of stock in the system that needs to work before people start reordering at the same rate,” he said.

Bourbons and other American whiskies continued their strong performance, turning in a 3.8% increase in revenue to an annual total of $5.3 billion. The sector remains one of the fastest-growing segments of the beverage alcohol market, trailing pre-mixed cocktails and spirits-based ready-to-drink products, tequila, and blended American whiskey. However, overall whisky sales across all categories were down by 2.2% as consumers traded down following several years of gains for higher-priced whiskies.

“What we saw in 2023 with financial and economic factors was a different sort of slowing down as consumers took stock of where they were,” said Marten Lodewijks of IWSR Drinks Analysis. “They were dealing with record credit card debt, they were dealing with high interest rates, inflation, prices being pushed through the system, global uncertainty in terms of wars popping up…so there was just a general negative sentiment in 2023 as consumers were quite clearly both saying and acting to be a little more conscious of where they were. I think now as some of the macro-economic fundamentals are starting to improve, inflation coming down, I would expect a return to the norm with continued strong growth in premiumzation,” he said on a DISCUS conference call with reporters.

One bright note from the presentation: American whiskey exports are up 64% year-over-year for the period from January to October of 2023, the most recent period for which data are available. This follows a 15-month extension of the European Union’s suspension of tariffs on American whiskey exports negotiated in December. The EU member nations account for 44% of all American whiskey exports, and grew by 29% in 2022 to $566 million, surpassing the pre-tariff record of $518 million set in 2017.

Editor’s note: This story was updated following a Zoom call with Slane Irish Whiskey founder Alex Conyngham.