U.S. distilled spirit sales and exports rise to record high in 2017

(Reuters) - Spirits companies sold 4 percent more liquor in the United States in 2017, hitting a record $26.2 billion, fueled by high-end brown liquor and a big thirst for Tequila and Vodka, an industry group said.

The Distilled Spirits Council, which represents companies such as Diageo PLC, Pernod Ricard SA and Brown-Forman Corp, said volumes rose 2.6 percent to 226 million 9-liter cases, reflecting millennials’ taste for high-end and super-premium blended scotch and whiskey products.

The spirits companies also exported a record $1.63 billion of U.S. spirits, a 14.3 percent rise over the prior year, led by growing taste for American spirits in the UK, Germany and Brazil.

“International adult consumers are exploring more expensive U.S. spirits driven by their fascination with American whiskey’s heritage, as well as its mixability and versatility in cocktails,” said the Council’s Senior Vice President for International Affairs Christine LoCascio in a statement.

In the United States, Vodka continued to be the spirit’s largest category representing a third of all volume, and saw its sales rise 3 percent to $6.2 billion in 2017. Sales were driven by more expensive brands, including Grey Goose and Ketel One.

Among other liquors, American Whiskey saw its sales rise 8.1 percent, while Tequila rose 9.9 percent and Irish Whiskey was up 12.8 percent. Rye Whiskey saw the strongest growth, with demand for those spirits rising 16.2 percent to 900,000 cases.

Spirits also took market share away from beers for the eighth straight year, rising 0.7 percent to 36.6 percent share of the total U.S. beverage alcohol market. Each percentage point of market share is worth $720 million in supplier sales revenue, the council said.

The recent U.S. overhaul in the tax code that reduced excise tax on spirits producers for the first time since the Civil War will put more than half-a-billion dollars in distiller pockets over two years, the council said.

“This historic tax cut will enable distillers to invest back in their businesses and communities, generate jobs and support agriculture and growing whiskey tourism,” Distilled Spirits Council’s Chief Executive Kraig Naasz said in a statement.

Reporting by Siddharth Cavale and Vibhuti Sharma in Bengaluru; Editing by Shailesh Kuber