Distilled Spirits: Volume I - Market Overview - US - February 2005

SUMMARY

The distilled spirits market in the U.S. totaled over $19 billion for 2004 for off-premiseconsumption. Sales have grown on average of 6% per year and are expected to continue. The marketgrew 40.1% between 1999 and 2004; white spirits, which is the majority category, grew 43.4% duringthat time period while dark spirits grew 36.6%. The strongest growth areas are premium products andflavored products, the latter having strengthened vodkas leading position in this market. As moreyoung adults reach legal drinking age, they are turning to flavored spirits in addition to orinstead of beer and wine, while their Baby Boomer parents are developing an appreciation for thehigh-end dark spirits. Spirits have also capitalized on the low-carb interest started by the Atkinsand South Beach diets.

This report provides an overview of the entire spirits market in the US, including a thoroughanalysis of market drivers, market size and trends, segmentation, retail distribution, the supplystructure, and advertising/promotion. For further analysis, including original consumer research,please see the other two volumes of this report. Volume II covers light spirits while volume IIIfocuses exclusively on dark spirits.

TABLE OF CONTENTS

INTRODUCTION AND ABBREVIATIONS

• Introduction
• Other relevant reports
• Definition
• Note on IRI data adjustments
• Abbreviations & terms
• Abbreviations
• Terms

EXECUTIVE SUMMARY

• The Echo Boom generation comes of age
• Low-carb products
• Flavored and premium products drive the market
• Lobbying for extended retail hours and locations
• White spirits are the category leader
• Eight companies dominate the market
• Liquor and package stores take the lead
• Growth expected to continue

MARKET DRIVERS

• Shifting demographics & consumption rates
• Figure 1: U.S. population, by generation, 2004 and 2010
• Figure 2: Americans who drank one or more alcoholic beverages in the past year, by age, 2003
• Figure 3: Average per capita expenditures of all CUs for food and beverages at home, by age ofreference person, 2002
• Low-carb
• Figure 4: Carbohydrate content in selected alcohols
• Changing perceptions towards alcohol
• Advertising limitations
• Flavor innovation
• States reconsider days and sites for spirits sales
• Figure 5: States that overturned "blue laws" and effective dates, 2002-04

MARKET SIZE & TRENDS

• Figure 6: Total U.S. sales of distilled spirits for off-premise consumption, at current andconstant prices, 1999-2004
• Figure 7: Total U.S. sales of distilled spirits for off-premise consumption, at current andconstant prices, 1999-2004

MARKET SEGMENTATION

• Overview
• Figure 8: Off-premise retail sales of distilled spirits, segmented by type, 2002 and 2004
• White spirits
• Figure 9: Sales of white spirits, 1999-2004
• Dark spirits
• Figure 10: Sales of dark spirits, 1999-2004

SUPPLY STRUCTURE

• FOREIGN TRADE
• Figure 11: Total U.S. distilled spirits imports*,1999-2004
• Figure 12: U.S. white spirits imports, top originating countries, 2002 and 2004
• Figure 13: Total U.S. distilled spirits exports*, 1999-2004
• Figure 14: U.S. distilled spirit exports, top destination countries, 2002 and 2004
• Sales by manufacturer
• Figure 15: Sales of distilled spirits, by manufacturer, 2002 and 2004
• Figure 16: Sales of distilled spirits, by manufacturer, 2004*

MAJOR COMPANIES AND BRANDS

• Diageo
• Future Brands
• Allied Domecq Spirits & Wine USA
• Bacardi USA
• Brown-Forman Corporation
• Constellation Brands
• Pernod Ricard
• Heaven Hill

ADVERTISING & PROMOTION

RETAIL DISTRIBUTION

• Introduction
• Figure 17: Sales of distilled spirits, by channel, 2002 and 2004
• Liquor stores
• Figure 18: U.S. liquor store sales of distilled spirits, at current and constant prices,1999-2004**
• Supermarkets
• Figure 19: U.S. supermarket sales of distilled spirits, at current and constant prices,1999-2004**

FUTURE & FORECAST

FUTURE TRENDS

• More consumers reaching the legal drinking age
• Low-carb shelf-life
• Flavored products will continue to grow
• States reconsider days for spirits sales
• Packaging continues innovations

MARKET FORECAST

• Distilled spirits for off-premise consumption
• Figure 20: Forecast of total U.S. sales of distilled spirits for off-premise consumption, atcurrent and constant prices, 2004-2009
• Figure 21: sales trends of distilled spirits for off-premise consumption, at current prices,1999-2009
• White spirits
• Figure 22: Forecast of U.S. sales of white spirits, at current and constant prices, 2004-2009
• Dark spirits
• Figure 23: Forecast of U.S. sales of dark spirits, at current and constant prices, 2004-2009
• Forecast Factors

APPENDIX: TRADE ASSOCIATIONS

APPENDIX: RESEARCH METHODOLOGY

• Consumer Research
• Sampling & Weighting
• Presentation & Definition
• Further Analysis
• Trade Research
• Informal trade research
• Formal trade research
• Desk & Internet Research
• Sources
• Definitions
• Forecasts

APPENDIX: WHAT IS MINTEL?

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