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Liquor industry trends as spirits take market share from beer

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A bartender creates specialty cocktails made with Casamigos at the opening party for Alo Miami on December 16, 2021 in Miami, Florida.

Jason Koerner | Getty Images

CHICAGO — The spirits industry is overcoming economic headwinds to meet changing consumer preferences as it chips away at the dominance of beer.

Spirits revenue market share grew from 28.7% in 2000 to 42.1% in 2022, surpassing beer for the first time ever, according to the Distilled Spirits Council of the United States. Beer holds a 41.9% market share, it said.

The trade organization, which is celebrating its 50th anniversary, held its annual conference this week in Chicago. The event saw spirits executives, trade leaders, distilling experts, and industry stakeholders gather to reflect on the key trends driving — but also slowing — growth across the industry this year.

Despite supply chain issues and high inflation, the beverage alcohol industry has a lot to toast to these days, said Chris Swonger, president and CEO of DISCUS.

“This is a great American success story,” Swonger said of the industry’s market share supremacy. “We’re focused on continuing to stay ahead through perseverance and by ensuring all of the positive trends we’re seeing continue.”

As the spirits industry works to maintain its top spot this year amid fears of a recession, here are some of the key trends industry leaders who spoke to CNBC see shaping the business today.

1. Celebrity brands steal the spotlight

A growing number of celebrities are investing their time — and money — in the spirits business.

From movie stars to athletes, models, and musicians, celebrities of all types are backing brands, getting involved with distillation, deciding on flavor profiles, or forging partnerships within the industry.

Those agreements have proven lucrative. In 2017, actor George Clooney and his co-owners sold the fast-growing tequila brand Casamigos to Diageo for $1 billion in a cash out that has motivated others to get in on the action.

“I saw there was lots of success in the celebrity tequila space and that intrigued me,” said actor Mark Wahlberg during a panel at the Chicago conference.  

Wahlberg launched the tequila brand Flecha Azul earlier this year with Mexican co-founder Aron Marquez. The pair has been traveling across the country promoting the brand, which Wahlberg touted as “the drink of the summer.”

“I have some friends that are successful in this business and I like to beat them at everything I do,” Wahlberg said.

“But it’s more than just the name,” he added. “Everything we’ve done from the beginning is about the quality of the product.” 

Wahlberg joins other high-profile individuals leveraging their celebrity in the liquor landscape including Ryan Reynolds, Sean “Diddy” Combs, Kendall Jenner, Dwayne Johnson, Michael Jordan and David Beckham.

2. Premiumization propels luxury spirits, RTD’s

3. No- and low-alcohol drinks are buzzy alternatives

In recent years. major alcohol companies including Heineken, Anheuser-Busch InBev and Molson Coors have joined in on the no- and low-alcohol drinks craze.

Demand for these alternatives has grown among consumers who want to drink less, or those who may want to abstain for health or personal reasons.

No- and low-alcohol beer and cider, wine, spirits, and ready-to-drink products grew by more than 7% in volume across 10 key global markets in 2022, according to IWSR Drinks Market Analysis.

“Younger generations especially are drinking less and drinking with more intention when they do,” said Tobin Ludwig, co-founder of Hella Cocktail Co.

The company uses botanical flavors and spices to give their line of non-alcoholic beverages a kick.

“You no longer need alcohol to socialize and have fun, in fact for many, alcohol was viewed or experienced as a detractor and choosing non-alcoholic options is now socially acceptable and in some segments of the sober curious movement, it’s the norm, not the exception,” he added.

4. Conscious consumers want a story

Today’s consumers increasingly want to feel connected to brands that share their values. Companies are tapping into this opportunity by highlighting their efforts in sustainability, contributions to local communities and commitments to diversity.

The trend will continue as consumers become more vocal about their priorities and begin to hold companies accountable for their practices.

More brands then ever are using eco-friendly packaging for their products as a way of limiting their environmental footprint. Craft spirits, typically produced by small distilleries that use locally sourced ingredients and materials, have also gained popularity in recent years.

Moreover, brands are doubling down on initiatives tied to diversity.

April Robinson, chief of staff at Pronghorn, said this “is not only a social good, but is good business for all.”

The company runs incubator and accelerator programs to develop Black talent within the spirits industry. Its research finds that while Black Americans represent 12% of alcohol consumers across categories, they make up only 7.8% of the sector’s labor force and 2% of executives in the industry.

Robinson said this “should be alarming to shareholders” as consumers become more conscious of the ways brands interact with marginalized communities.

5. Supply chain and inflationary issues persist


A bartender creates specialty cocktails made with Casamigos at the opening party for Alo Miami on December 16, 2021 in Miami, Florida.

Jason Koerner | Getty Images

CHICAGO — The spirits industry is overcoming economic headwinds to meet changing consumer preferences as it chips away at the dominance of beer.

Spirits revenue market share grew from 28.7% in 2000 to 42.1% in 2022, surpassing beer for the first time ever, according to the Distilled Spirits Council of the United States. Beer holds a 41.9% market share, it said.

The trade organization, which is celebrating its 50th anniversary, held its annual conference this week in Chicago. The event saw spirits executives, trade leaders, distilling experts, and industry stakeholders gather to reflect on the key trends driving — but also slowing — growth across the industry this year.

Despite supply chain issues and high inflation, the beverage alcohol industry has a lot to toast to these days, said Chris Swonger, president and CEO of DISCUS.

“This is a great American success story,” Swonger said of the industry’s market share supremacy. “We’re focused on continuing to stay ahead through perseverance and by ensuring all of the positive trends we’re seeing continue.”

As the spirits industry works to maintain its top spot this year amid fears of a recession, here are some of the key trends industry leaders who spoke to CNBC see shaping the business today.

1. Celebrity brands steal the spotlight

A growing number of celebrities are investing their time — and money — in the spirits business.

From movie stars to athletes, models, and musicians, celebrities of all types are backing brands, getting involved with distillation, deciding on flavor profiles, or forging partnerships within the industry.

Those agreements have proven lucrative. In 2017, actor George Clooney and his co-owners sold the fast-growing tequila brand Casamigos to Diageo for $1 billion in a cash out that has motivated others to get in on the action.

“I saw there was lots of success in the celebrity tequila space and that intrigued me,” said actor Mark Wahlberg during a panel at the Chicago conference.  

Wahlberg launched the tequila brand Flecha Azul earlier this year with Mexican co-founder Aron Marquez. The pair has been traveling across the country promoting the brand, which Wahlberg touted as “the drink of the summer.”

“I have some friends that are successful in this business and I like to beat them at everything I do,” Wahlberg said.

“But it’s more than just the name,” he added. “Everything we’ve done from the beginning is about the quality of the product.” 

Wahlberg joins other high-profile individuals leveraging their celebrity in the liquor landscape including Ryan Reynolds, Sean “Diddy” Combs, Kendall Jenner, Dwayne Johnson, Michael Jordan and David Beckham.

Dwayne 'The Rock' Johnson on Teremana Tequila, XFL and more

2. Premiumization propels luxury spirits, RTD’s

3. No- and low-alcohol drinks are buzzy alternatives

In recent years. major alcohol companies including Heineken, Anheuser-Busch InBev and Molson Coors have joined in on the no- and low-alcohol drinks craze.

Demand for these alternatives has grown among consumers who want to drink less, or those who may want to abstain for health or personal reasons.

No- and low-alcohol beer and cider, wine, spirits, and ready-to-drink products grew by more than 7% in volume across 10 key global markets in 2022, according to IWSR Drinks Market Analysis.

“Younger generations especially are drinking less and drinking with more intention when they do,” said Tobin Ludwig, co-founder of Hella Cocktail Co.

The company uses botanical flavors and spices to give their line of non-alcoholic beverages a kick.

“You no longer need alcohol to socialize and have fun, in fact for many, alcohol was viewed or experienced as a detractor and choosing non-alcoholic options is now socially acceptable and in some segments of the sober curious movement, it’s the norm, not the exception,” he added.

4. Conscious consumers want a story

Today’s consumers increasingly want to feel connected to brands that share their values. Companies are tapping into this opportunity by highlighting their efforts in sustainability, contributions to local communities and commitments to diversity.

The trend will continue as consumers become more vocal about their priorities and begin to hold companies accountable for their practices.

More brands then ever are using eco-friendly packaging for their products as a way of limiting their environmental footprint. Craft spirits, typically produced by small distilleries that use locally sourced ingredients and materials, have also gained popularity in recent years.

Moreover, brands are doubling down on initiatives tied to diversity.

April Robinson, chief of staff at Pronghorn, said this “is not only a social good, but is good business for all.”

The company runs incubator and accelerator programs to develop Black talent within the spirits industry. Its research finds that while Black Americans represent 12% of alcohol consumers across categories, they make up only 7.8% of the sector’s labor force and 2% of executives in the industry.

Robinson said this “should be alarming to shareholders” as consumers become more conscious of the ways brands interact with marginalized communities.

5. Supply chain and inflationary issues persist

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