NewsWire: 2/13/21
- Increased demand for high-end liquors has driven U.S. spirit sales to their highest levels in at least 40 years. With bars closed and most leisure activities cancelled, Americans are splurging on tequila and whiskey to drink at home. (The Wall Street Journal)
- NH: According to the Distilled Spirits Council, the liquor industry’s US revenue increased by 7.7% in 2020. That’s a $2.2B increase from 2019. Diageo (DEO), one of the world’s largest distillers, saw its US sales rise in the last six months of 2020 by 15% compared to the same period in 2019.
- What’s driving this surge in revenue? High-end spirits. Liquor over $40 per 750 ml made up 40% of the industry's growth. That’s a six percentage point increase from the year prior. Diageo’s premium tequila brands Don Julio and George Clooney saw sales increase by 55% and 137% YoY in North America.
- At the beginning of the pandemic, we wondered if Americans were drinking more. Yes, sales were up but could people simply be “stocking up” for the lockdown? Well, an October survey by JAMA seems to answer that question. They found that Americans are drinking 14% more than in pre-pandemic life. (See “Are Americans Actually Drinking More?”) So instead of spending money on nights out, it's safe to say that sipping high-end booze at home has become the new form of entertainment.
Did You Know?
- Megamalls Have Yet to See Returns. In recent years, mall operators have poured billions into theme parks in an effort to bring back shoppers. American Dream, the New Jersey megamall that opened in late 2019 (see “A Mall Built for Entertainment Rather Than Shopping?”), features multiple amusement parks and several mini-golf courses. More than half (55%) of the mall is occupied by entertainment tenants, compared to just 2% of U.S. mall space overall. Triple Five, the real estate firm behind American Dream that also owns Minnesota’s Mall of America, anticipated that its new property would receive 40 million visitors a year, which would put it on par with Disney World. Just a few months after opening, however, the pandemic hit—and visitors vanished. But the bills haven’t stopped coming. This is the same dilemma facing Pyramid Management Cos, which owns Destiny USA, the largest mall in New York. Ironically, the attractions these malls considered their potential savior have now become their biggest headache.
