Smaller Segments Buzzing in Spirits, Wine & Beer

CHICAGO — In the alcohol industry, smaller brands and segments are outpacing and, in some cases, even taking share from those that are more well-established, according to Technomic Inc.'s analysis of 2014 year-end results.

"Many of the categories and brands that dominate the industry are being challenged," said Technomic Senior Director Donna Hood Crecca. "The trend creates increased competition for shelf space in bars and at retail, and for consumer dollars in 2015. The monster categories such as light beer and vodka are feeling the heat from the likes of craft beer and bourbon, and the legacy brands are increasingly pitted against upstarts in the battle for operator attention and consumer occasions."

Many smaller brands are seeing a trend of accelerated growth rates, while numerous labels whose performances often influence total category trends lost volume, according to Technomic.

Case in point: 

• The largest beer segments, domestic light and regular, both shed volume, while smaller categories craft beer and hard cider posted double-digit increases.
• In the spirits segment, vodka continues to hold one-third of total spirits volume and improved its momentum in 2014. However, its pace was eclipsed by several smaller categories, including Irish whiskey, cordials/liqueurs and straight American whiskey.
• Table wine dominates the wine market and improved in 2014 compared to 2013, but was again markedly outpaced by sparkling wine, a considerably smaller segment.

"Beer shed volume again in 2014 and the dynamics within beer continue to evolve, while the growth in spirits and wine is ongoing," added Technomic Director of Research Eric Schmidt. "Changing flavor preferences and greater interest in production methods and new formulations are driving factors. We're tracking a sharp decline in sweet flavor profiles and a rise in liquids with real 'heat' or herbal nuance in the spirits industry, and momentum among beer, spirits and even wine products with unique production processes."