PETER CRESSY: “SPIRITS ARE VERY MUCH BACK IN VOGUE.”

DISCUS released a report that suggested spirits’ success is in part due to consumers purchasing more expensive brands, fewer government regulations, and less beer discounting. “Among the factors contributing to the gains are a gradual leveling of the playing field in the marketing and regulation arenas versus its beer and wine competitors; a consumer trend of ‘trading up’ to more expensive brands; and the likelihood of less beer discounting.” According to the report, the spirits industry should make $17.4 billion this year with a volume increase of 3.3% and revenue gain of 7.5% in 2005. Furthermore, spirit suppliers own 32% of the alcohol industry’s share, up from 31.2% in 2004, and close to four points higher than in 1999. “Virtually all of that has come at the expense of beer as winemakers have also marked strong share gains in the last few years.” Vodka is the leading contender in the spirits market with 27% of sales and a 7% revenue growth rate. Whiskey is ranked #2 by volume followed by rum and then tequila.