The Luxury Brand Index (LBI) 2022 Second-Quarter Report is showing premium brands continue to dominate despite the highest inflation in decades and negative economic growth in the second quarter of 2022.
The LBI is a tool created by the Distilled Spirits Council of the United States (DISCUS) to analyze sales of spirits brands at the top end of the distilled spirits market. It was launched at the DISCUS Annual Conference in October 2021 and is released quarterly to provide insight to the beverage business community, analysts, and media. The LBI tracks the performance of spirits brands that have a 750ml retail price of $50 or more.
The report shows luxury brands grew 23 percent in the second quarter of 2022 compared with the same quarter of 2021.
The premiumization trend continued through the second quarter of 2022 at a slower, but still remarkable, rate as compared to the growth rate between 2021 and 2020. In the second quarter of 2021, the index grew 50 percent from the same period in 2020. In the second quarter of 2022, despite inflation taking hold and economic growth disappearing, luxury spirits continued to rise. They were further bolstered by the ongoing recovery of on-premise sales, which traditionally have supported premium spirits.
“We continued to see strong consumer demand for luxury spirits brands through the second quarter of 2022 despite the current economic environment,” said DISCUS Chief of Public Policy Christine LoCascio, noting that historically, the spirits sector has been resilient during tough economic conditions. “It appears macroeconomic headwinds slowed the astonishing growth rate of luxury spirits sales of 2021 but were not strong enough to reverse the positive premiumization trend. Distilled spirits are affordable luxuries that bring spirits consumers great joy. Consumers are willing to spend extra for that special spirit and choosing to drink better, not more.”
The standouts from the second quarter report include tequila, which had the largest increase with a 43 percent annual growth rate. Tequila was closely followed by American Whiskey, which rose 30 percent.
When zooming out further and looking at the five years between the second quarter of 2017 and 2022, all spirits categories included in the LBI had increased annual growth ranging from 8 to 45 percent, with an average rate of 24 percent. Again, American whiskey and tequila were the best performing categories as ach grew 45 percent per year. The next largest jump was Cognac with an annual growth rate of 18 percent.
Plan to Attend or Participate in Bar & Restaurant Expo, March 27-29, 2023
To learn about the latest trends, issues and hot topics, and to experience and taste the best products within the bar, restaurant and hospitality industry, plan to attend Bar & Restaurant Expo, March 27-29, 2023 in Las Vegas. Visit BarandRestaurantExpo.com.
To book your sponsorship or exhibit space at Bar & Restaurant Expo, contact:
Veronica Gonnello (for companies A to G) e: [email protected] p: 212-895-8244
Tim Schultz (for companies H to Q) e: [email protected] p: (917) 258-8589
Fadi Alsayegh (for companies R to Z) e: [email protected] p: 917-258-5174
Also, be sure to follow Bar & Restaurant on Facebook and Instagram for all the latest industry news and trends.