Sales of bourbon could rival those of Scotch in the UK over the next five to ten years new data has shown.
Growth of US whiskey, driven by bourbon, is set to accelerate considerably in the UK, with volume sales expected to rise by 26.7% between 2016 to 2020.
US whiskey is expected to have the biggest evolution over the next five years in the UK with volumes set to reach 26.7%, ahead of rum (+22.8%) and gin (+23.8).
This is in comparison to Scotch, which is expected to grow by 1.2%.
The forecasts were revealed in data from the Vinexpo/IWSR Global Study 2015 – 2020 released this week, which mapped the fortunes of various spirits over a five year period from 2016 to 2020.
The strength of US whiskey is expected to be driven by flavoured bourbons popular with millennials, as well as also forming the base for many cocktails – a trend which is expected to increasingly cross over from the US to the UK.
Scotch will continue to reign in the volume stakes, expected to reach 5.91 million 9 litre cases in 2020 compared to US whiskey’s 2.42 million.
But US whiskey will continue to encroach on Scotch’s share.
“In the UK, Scotch is losing ground as core consumers age or move to more on-trend categories. We expect that trend to continue,” Guillaume Deglise, Vinexpo’s CEO, told Harpers.
“The cocktail trend has a lot to do with it, and also there’s been quite a lot of discounts of US whiskey in UK off-trade recently.
“Sales of Scotch will remain pretty static, rising 1.2% from 5.8 to 5.9 from 2016 to 2020. Whereas US whiskey will grow 26% from 1.9 million to 2.4 million cases.”
Scotch’s main growth is predicted be driven by demand in key export markets, with volume sales expected to climb from a plateau of 86.5 million cases to 93.8 million globally by 2020 – driven by malts rather than blends.
Vodka remains the category leader in the UK, with volume in 2016 reaching 9.8 million cases, ahead of Scotch (5.8 million) and the combined whisk(e)y category (bourbon and Scotch (7.7 million).
According to Vinexpo/IWSR figures, vodka will continue to grow in the UK albeit at a slower rate compared to US whiskey, with a larger divide between entry level at the slow end and premium driving the majority of growth.
Vodka globally has troubled times ahead however, with global category decline expected to accelerate.
This will mainly be due to major decline in Russia and the Ukraine, which have historically been global consumption leaders in this category.
“Vodka has seen sales fall at home in the CIS [The Commonwealth of Independent States] and in Europe and the USA. As a result, world consumption will fall from 471.2 cases in 2015 to 438.8 million by 2020,” Deglise observed.
“Vodka is declining globally, but this is more due to a major decline in Russia and Ukraine where consumers are switching to wine and other spirits.”
Other spirits and global consumption
Premiumisation within vodka will help to maintain vodka’s status as the world’s second biggest spirit behind Baiju – which is almost exclusively drunk in China, the world’s biggest consumer of spirits.
The UK is also tipped to become a “key sales driver” of growth for tequila as perception around the spirit changes.
Overall, the category is expected to be “extremely buoyant” over the next few years, according to the report.
Sales are particularly strong in the US and Mexico at the moment, which account for 95% of all tequila consumption globally, driven by the success of the Margarita cocktail.
The boom in craft spirits and mixology in the US will translate increasingly to the UK over the next five years, buoying not only tequila sales but others too.
“The cocktail trend is everywhere at the moment. It’s global. Tequila will be a key driver of growth both in the US and the UK, which are both leading markets for mixology,” said Deglise.
The picture for spirits overall in Europe however, is more complex.
Europe currently drinks more wine per capita than spirits; in the US the reverse is true.
This gap is expected to widen over the next five years, with volume in Europe expected to dip by 0.13 million cases, whereas the Americas are expected to grow by 6.04 million.
This picture of declining volume sales in Europe is echoed by recent findings from Euromonitor International, which revealed a decline of spirits sales in western Europe from 1.98 billion litres to 1.87 billion litres in the five years to December 31, 2015.
Only the UK, Turkey, Belgium, Switzerland and Denmark, showed signs of growth.
According to Deglise, this disparity between Europe and the US, is also driven by millennials’ love of flavoured spirits and the craft boom.
“Sales of spirits will rise in the US, which is where the craft spirits trend started. Europe is more conservative in its spirits consumption. Trends tend to start in the US then come to Europe so we may see the rise in spirits sales in Europe beyond 2020. But over the next rise years, we don’t expect to see volume growth in western Europe,” he added.
It looks as if gin’s magic touch will help spirits in Europe, which is expected to become the word’s largest gin-consuming region by 2020.
Rum consumption on the other hand is showing global decline, but is expected to see considerable growth in the UK, slated to grow 22.8% to 2020.
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