Liquor sales in the U.S. climbed 5.6 percent to $18.2 billion last year, better than an industry group expected, as consumers bought more-expensive Stolichnaya Elit vodka and single-malt Scotch whisky.
Consumers will continue to ``trade up'' to more expensive liquors even as they contend with the slowest housing market in 26 years and gasoline prices near $3 a gallon, the group said.
Sales of the highest-priced liquors grew 12 percent in 2007, the group said. Those brands accounted for 10 percent of liquor sales by volume and accounted for more than one-third of the growth. A 750-milliliter bottle of Stoli Elit sells for $75 in New York.
``When we look at where our sales were, once again, the higher-end the product, the greater the growth in our sales volume,'' David Osgo, the group's chief economist, said at the Distilled Spirit Council's annual industry review in New York.
Exports by U.S. liquor companies increased 15 percent to $1 billion in 2007, driven by sales of whiskey, as international consumers took advantage of the decline in the dollar, the group said. Liquor's share of the U.S. alcoholic- beverage market was little changed last year at 33 percent.
U.S. vodka sales rose 7.7 percent to $4.3 billion and represent about a quarter of the total, the spirits group said. Whiskey climbed 3.8 percent to $5.2 billion, and rum gained 8.9 percent to $2.1 billion, the group said.
Fortune Brands Inc., the holding company for Jim Beam bourbon, said separately today that spirits sales grew 3.7 percent to $2.61 billion in 2007. The Deerfield, Illinois-based company expected demand in India and China for cognacs and Scotch whiskys to grow, Chief Executive Officer Bruce Carbonari said in a conference call with investors.
Brown-Forman Corp. (BF/B), owner of Jack Daniel's whiskey, said in November that international sales of the spirit made up for slipping U.S. volume growth during the six months ended October 31. The maker of Southern Comfort liqueur and Finlandia vodka raised U.S. prices last year as grain and fuel costs climbed.
Fortune Brands dropped $1.23, or 1.8 percent, to $67.59 at 4:03 p.m. in New York Stock Exchange composite trading. Brown- Forman's Class B shares fell $1.72, or 2.6 percent, to $64.17.
-- With reporting by Oliver Staley in New York and Mary Jane Credeur and Mark Clothier in Atlanta. Editors: Brad Skillman, Stefanie Batcho-Lino.
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