Higher Wine and Spirits Sales Boosts Marketing Programs

It’s not that U.S. consumers are drinking less than they used to. Alcoholic beverages account for about 1% of consumer spending and this figure has held steady for decades. But, the recession has changed where consumers are buying these beverages so ad strategies should be modified as well.

According to Great American Group, about 40% of spending in this category goes to bars and restaurants while the rest is doled out at retail for products to take home. Previously, only 25% of spending in this category occurred out of home. At the same time, analysts point out, “A drink at a bar or restaurant costs 80% more in 2012 than in 1982, while a bottle at the store is 40% cheaper than 30 years ago.” Following this strategy, consumers are increasingly spending more at bars and restaurants for less product.

But as the economy improves, consumers are going upscale at wine shops and liquor stores. For the most part, spending on $20+ bottles of wine is way up. Historically, the numbers associated with high-​end domestic brands were small. But analysts say that at least 27 brands are now in the $2 million to $13 million a year category in store sales. Numbers like this generate attention and producers may now have enough funds to engage in larger ad campaigns.

The spirits sector is also enjoying a revival. In particular, consumers are showing interest in the bourbon and vodka categories. Both flavored bourbons and prepared cocktails have been seeing double digit sales increases recently.

Wine and liquor stores, along with distributors as promotional partners, should take advantage of the changing market conditions and modify advertising strategies. First, they can point out the obvious economic advantages of buying alcoholic beverage to enjoy at home. In addition, they can build on ad campaigns that have been funded by wineries and spirits producers in order to increase their sales.

[Source: Wine and Spirits Monitor. Great American​.com. July 2012. Web. 20 Jul. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.