Liquor Sales Steady in Spite of Economy

We didn't want this holiday article to slip by unnoticed. Back in December, the Denver Post reported that Colorado liquor sales remain steady, although consumers are steering towards box wine and well drinks over high-end vintage vino and top shelf liquors. Oh yeah, there are mentions of Western slope establishments like Peach Street Distillers and Crossroads Wine & Liquors in Grand Junction.

Under the headline, "Alcohol Sales Have Survived Despite a Slow Economy, But Tastes Are Shifting: Quantity Over Quality," Post Reporter Nancy Lofholm writes:

"Customer numbers at Colorado liquor stores aren't down and liquor excise taxes are up 7 percent this year, lending credence to the old saw that people continue to imbibe in tough times. But liquor store owners and liquor industry officials say drinkers are avoiding high- end spirits in favor of more moderately priced goods."

"Or if they can't stand to give up their ultra anejo tequila and single-malt scotch, they may buy it in smaller quantities."

"I've never seen an environment like this," said Jim Smith, president of Republic National Distributing Co., who predicts that by the time the tinsel comes down, liquor retailers will have had a decent overall season."

"But their revenues just might come more from $20 premium boxed wines. Sales of the penny-wise cartons have jumped 40 percent in the past month, according to a survey by A.E. Nielsen. Or from economy vodka, which the survey showed has jumped 7 percent while sales of luxury vodkas have declined."

"There are people out there that this downturn hasn't even bothered, but then there is the guy who would buy the $25 bottle of wine and is now buying the $10 bottle," said Daveco Liquors manager Ted Sutton."

"No one has plunked down $13,000 for the store's priciest bottle of 55-year-old scotch. The last five-figure bottle of booze to sell there went out the door this summer before the economy really tanked."

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Wine Consumption Up Globally

In her August 26 article, "Current Trends in and Around the World of Wines," blogger and Wine Examiner Leslie Cramer scrutinized the increasing numbers of wine consumers globally. Of course, this was written before the scary, scary days of a market meltdown and severe recessionary fears. But we've heard in other quarters that one of the few commodities that's recession proof is alcohol. People gotta drown their sorrows somehow.

Cramer wrote:

"In the second of a series of articles related to trends in the online wine industry, Global Wine & Spirits is now taking a look at who drives wine consumption worldwide and what the role of the Internet is in market growth.

"World wine consumption is up, slightly. According to Vinexpo 2007, this represents a 1 percent yearly growth in expected volumes and 2.3 percent in expected value between 1999 and 2009. While the news is better for higher-valued wines overall, this growth is not happening everywhere and the US market has been the main engine for this growth. In fact, according to Adams Handbook, wine volumes grew a whopping 46 percent between 1996 and 2006 for the American market.

"Taking a closer look at these consumers and their drinking habits, and based on a study of the Wine Market Council, it is interesting to note that a core group of drinkers is driving consumption and therefore growth. This core group of drinkers according to the same study represents 17.4 percent of the population, but consumes 92 percent of volumes. These consumers are going online too: while 5 percent of these core drinkers had bought online in 2000, this number was up to 20 percent in 2006! They have also been buying from wineries: While 6% had bought from a winery site in 2003, 17 percent had bought from a winery website in 2006.

"One wonders if this trend will spread outside the U.S., and what impact this will have on the online wine industry. A way to answer that is perhaps to look at generational behavior. The under 30 population (Millennial Generation) are heavy Internet users. There is no doubt that they are a force to be reckoned with and that their consumption behavior for wines will mirror trends observed in their consumption patterns elsewhere."

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