Pa. residents are ‘drinking better, not more’ driving liquor sales growth during pandemic, industry group says

The 2020-21 fiscal year was a “fantastic” year for the distilled spirits industry, despite the ongoing COVID-19 pandemic, inflation and disruptions to the supply chain, industry officials said Wednesday. 

Revenue in the U.S. distilled spirits industry, which includes, among other spirits, whiskey, tequila, rum and vodka, grew by 12 percent from 2020 to 2021, according to the Distilled Spirits Council of the United States, (DISCUS) a national trade organization representing distilled spirit marketers and producers. 

Nationally, super-premium spirits saw the fastest revenue growth in the 2020-21 fiscal year, with a growth rate of 82 percent from the super premium and high-end product categories. 

“People are drinking better, not more,” Christine LoCascio, DISCUS’ public policy chief said, adding that “premiumization is occurring across categories.” 

DISCUS attributes the increased demand for premium beverages to higher-than-usual disposable income, compared to pre-pandemic levels. 

Pennsylvanians’ drinking habits are reflecting that, with consumers choosing higher-end products, according to the Pennsylvania Liquor Control Board’s 2020-21 annual report. 

“Sales of premium products have increased with customers spending more dollars on higher-priced products,” the report read, noting that over the same time frame, premium, super-premium and ultra-premium spirits saw a 22.41 percent increase, 27.16 percent increase and 59.13 percent increase respectively.

DISCUS also reported a national increase in revenue from tequila sales.

Of the $3.8 billion in revenue growth reported by DISCUS, tequila revenue was responsible for 31 percent of that growth — a trend that has also been reported by Pennsylvania’s Liquor Control Board. 

In the 2020-21 fiscal year, Pennsylvania saw a 52.3 percent increase in total dollar sales for tequila, according to the Liquor Control Board. 

As the nation emerged from on-again-off-again lockdowns in 2020, LoCascio said tequila revenue “helped drive revenue growth in 2021.”

Despite the revenue growth and increased demand for premium spirits, supply chain disruptions have continued to have an impact on the industry, LoCascio said Wednesday, adding that in 2022, supply chain issues are “expected to improve.”

Liquor Control Board spokesperson Shawn Kelly told the Capital-Star that despite inflation concerns, the board has “not instituted price changes since before the pandemic.”

However, suppliers have made price change requests to the board, affecting retail prices, Kelly said. 

Last September the board implemented a two-bottle limit on 43 different spirits, citing COVID-19 induced disruptions to the supply chain. 

There are currently 37 spirits on the ration list. 

Kelly said that as products become more widely available again, the board will rescind the purchase limits.