US spirits sales stalled in January, hit by weakening demand for Scotch, rum and gin and stoking fears of weaker growth in 2024.
In volume terms, spirits sales declined 0.3% year-on-year in January to 4.32m nine-litre cases. Sales value edged up 0.9% to $948.78m, according to figures from the National Alcohol Beverage Control Association (NABCA).
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The NABCA data, which covers 17 states and jurisdictions in the US, showed Scotch, rum and gin saw the largest volume declines of “major categories” in January, dropping 8.8%, 6.3% and 6.9% respectively. Value sales of Scotch, rum and gin fell 7.9%, 3.6% and 3.9%.
Robert Moskow, an analyst at TD Cowen, said the data suggested a wider deceleration trend for the year ahead.
“The data confirms our view that the industry will face slower growth in 2024 due to reduced incidence post-pandemic and pantry de-loading,” he said.
When adjusted for eight additional selling days in January, the value of sales declined 0.6% year on year, Moskow said in a TD Cowen report on the data.
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By GlobalDataSpeaking to investors following its half-year results in January, Diageo CEO Debra Crew said she expected US sales to improve slowly following the pandemic peak.
“The US consumer environment is still normalising from the Covid supercycle. Sentiment is improving versus prior year but consumers are still facing multiple headwinds,” she said.
“The path back to industry normalisation in the US will not be linear and will recover more gradually.”
US brandy and Cognac sales also declined in January, with a negative category price mix led by Cognac, NABCA said. The category declined 4.8% in volume terms while Cognac alone declined 7.5%. In value terms, the category declined 9.1% while Cognac fell 11.5%.
Speaking to Just Drinks last month, Cognac producers said they were optimistic sales could turn around this year as overstocking and shipment issues ease.
Sales of cocktails and Tequila in US control states grew in January, meanwhile, both in volume and value.
Ready-to-drink cocktails grew 6.8% in volume and 6.5% in value terms – shooting up 18% in volume across the 12-month period and 20.8% in value. Sales were led by canned RTDs, NABCA said.
Tequila grew volume sales by 5.2% year-on-year while the value of sales grew 6.5%.
Vodka and American whiskey were the only other categories to experience volume growth in January.
In wine, sales declined 11.4% in volume to 1.13m nine-litre cases and 13.2% in value to $124.33m compared to January 2023.
NABCA said this “rare negative price mix” of -1.8% was driven by Pennsylvania, due to the calendar anomaly.
