Bourbon has been on an upward trajectory for the past 10 years — and it’s grown exponentially in the last five. This year, with the threat of tariffs and the entire industry being upended by Covid-19, some weren’t so sure that bourbon could continue at the same clip, but it turns out, not even a global pandemic can slow the category’s growth down.

Assessing the Past and Future of Bourbon 

Data from Drizly suggests that the bourbon boom will not only continue, but that there’s no end in sight. This is excellent news for retailers — especially those looking to expand their bourbon offerings. Liz Paquette, the head of consumer insights of Drizly, assures off-premise operators that bourbon is “one of the leading spirits with the most potential to help grow a retail business over the next few years.” 

From a market share perspective, says Paquette, bourbon has grown slowly but consistently year-over-year on Drizly’s platform since 2015. “Even amid the Covid-19 crisis when we did see sudden decreases for certain categories (such as vodka) bourbon has remained a stable and strong player in the liquor category — and overall — on Drizly.” The percentage of bourbon’s market share within the spirits category averaged 15.95 percent for all of 2019. In 2020, bourbon started off at 15.82 percent in January and February (pre-quarantine), and then it rose up to 15.99 percent in the second quarter through June 4. 

Nielsen data shows that total whiskey sales in the U.S. in 2019 amounted to more than $5.7 billion; within the category, straight bourbon accounted for over $1.6 billion in revenue. In the first quarter of 2020, sales were up 19.9 percent the week ending March 28 (compared with sales from the same week in 2019). For the 11-week period of the second quarter that ended on June 13, sales were up 37 percent from the same week the previous year.  

“The last five years seem like a blur,” says Justin Sloan, co-owner with Justin Thompson of Justin’s House of Bourbon, which has locations in Lexington and Louisville, Ky. The bourbon boom, he says, “was like an explosion that no one really saw coming.” Justin’s House of Bourbon carries about 2,000 different SKUs, primarily focused on bourbon, rye, and American whiskey. Bourbon accounts for approximately 85 percent of retail sales. The business also has a strong focus on rare and vintage bottles that date back from the early 1900s to today — they represent about 40 percent of sales. Sloan is confident that the bourbon industry is going to keep growing for a while. “There’s a thirst for bourbon,” he says, “that can’t even be met by the people in the sector right now.” 

Looking back over the past decade, the global data firm IWSR, reports that the compound annual growth rate from 2009 to 2019 indicates that total bourbon volume in the U.S. has increased 7.7 percent and value has increased 11.6 percent. In terms of absolute volume growth, bourbon was the fifth largest-growing alcohol category in the U.S. last year. The IWSR’s data also shows that bourbon’s volume in the off-premise sector was up 9.2 percent in 2019 (after having grown 7.2 percent in 2018). Its total value was up 12.2 percent last year (after being up 9.9 percent in 2018). In terms of absolute volume growth in spirits, bourbon grew the most in the U.S. in 2019, followed by tequila, Canadian whisky, and vodka. This year, the IWSR tells BevAlc Insights it predicts that total bourbon volume in the U.S. will grow by about 7 percent.

Are Any Other Spirits Encroaching on Bourbon’s Territory?

“Not with any kind of market share that matters,” says Sloan. However, while it’s not about to outpace bourbon’s trajectory, tequila has become a spirit to watch. It’s had the largest share gain of spirits overall on Drizly in the last five years. Silver tequila had an average 7.5 percent of market share within the spirits category in all of 2019, and by June 4, its percentage increased to 10.17 percent. A similar trend is reflected in overall share on Drizly. Bourbon grew from 6.02 percent in 2015 to 6.5 percent in 2020 and blanco tequila went up from 1.74 percent to 3.82 percent, whereas major players like vodka and Scotch both experienced decreases over that same period.

“The only other spirit broaching the expansion of bourbon [sales] numbers right now would be tequila,” says Paul Nani, the owner of Casa Oliveira in New York City, but Nani says this definitely doesn’t mean bourbon is slowing down. In his shop, bourbon accounts for about 30 to 40 percent of brown spirits sales. “It’s obviously been the spirit with the most growth over the past 6 to 7 years.” 

Prav Saraff, the director of operations at 1 West Dupont Circle Wines and Liquors and Angel’s Share in Washington, D.C., has also observed bourbon’s exponential growth, but he wonders how long it’ll continue. “The growth the category has seen in recent history is one that’s tough to sustain,” he says. “I feel like other spirits such as rum, Armagnac, rye, and even American single malts could chip away at the growth [over time], and help propel retailers even further, especially those who are savvy.” 

How the Bourbon Market Has Changed 

“In the last year alone,” says Paquette, “the amount of bourbon UPCs on Drizly increased by more than 50 percent. We are seeing greater variety in the mix, though some key top sellers do drive the majority of sales.”

The list of top-selling bourbon brands on Drizly hasn’t changed much in the last 5 years: 

TOP-SELLING BOURBONS, PAST 3 MONTHS

  1. Bulleit
  2. Maker’s Mark
  3. Jack Daniel’s
  4. Woodford Reserve
  5. Jim Beam
  6. Basil Hayden’s
  7. Buffalo Trace
  8. Knob Creek
  9. Evan Williams
  10. Four Roses

Want to grow your retail business?

Get sales-driving data and insights in your inbox every week.

TOP-SELLING BOURBONS, 2019

  1. Bulleit
  2. Jack Daniel’s
  3. Maker’s Mark
  4. Jim Beam
  5. Woodford Reserve
  6. Basil Hayden’s
  7. Evan Williams
  8. Knob Creek
  9. Buffalo Trace
  10. Blanton’s

TOP-SELLING BOURBONS, 2015

  1. Bulleit
  2. Jack Daniel’s
  3. Maker’s Mark
  4. Jim Beam
  5. Woodford Reserve
  6. Buffalo Trace
  7. Knob Creek
  8. Basil Hayden’s
  9. Evan Williams
  10. Blanton’s

“Bourbon remains a steady investment from a share perspective on Drizly,” says Paquette. While it didn’t experience significant year-over-year growth, bourbon has remained relatively constant over the past year and a half, even amid the Covid-19 crisis.” Tequila has experienced the most share growth, she says, followed by liqueurs, cordials, and schnapps, and gin. These categories, along with mezcal, have experienced the most outpaced growth during the novel coronavirus period.

Nielsen also reported high USD growth rates for tequila, cordials, gin, and bourbon in its measured off-premise channels during a similar Covid-19 period.

Over the last decade, one of the changes Nani has observed is a significant difference in product availability. “Premium bourbons are now being allocated because demand has increased, which also drives up prices,” he says. “Blanton’s used to have a 10-case price on it. You could buy as much as you wanted. Now we’re allocated a 6-pack case of it every three months.” 

“To me,” says Saraff, “the biggest change has been the spread of knowledge and desire for the product, which has led to an allocation of essentially everything. With greater demand, sadly, comes shorter supply.” One of the ways Saraff has kept up with demand in his shops is to offer bottlings from private barrels. “Private barrel picks present the single best value to the consumer,” he says, adding that barrel picks have never been more popular. “Currently, we sell out every barrel pick we do in 2 minutes or less for the whole barrel.” 

Who’s Buying Bourbon?

Across the board, the average bourbon consumer tends to be male. On Drizly 61.81 percent of bourbon drinkers are men. For the most part, they’re between the ages of 28 to 39 years old, with the average age in the last 24 months being 37.84 years old. They’re “slightly older than the average Drizly customer,” says Paquette, “but younger than the average liquor buyer on Drizly.” (The overall average age of consumers on Drizly is 37.35 years old and the average age of liquor buyers is 38.08.)

Drizly continues to see regional divides in terms of who is buying the most bourbon across the country. The markets that purchase the most bourbon as a percentage of total orders within that market include:

  • Lexington and Louisville, Ky.
  • Florida markets, including North Florida, Orlando, Gainesville, St. Augustine, Jacksonville, and Tampa Bay
  • St. Louis and Springfield, Mo.
  • Austin, Texas
  • Washington, D.C.
  • Seattle, Wash.
  • Chicago, Ill.

Similarly, IWSR research has found that bourbon consumers in the U.S. are approximately 63 percent male. The global data firm’s numbers show a slight difference in the age range. It has found the average consumers to be 25 to 34 years old. The IWSR reports that the largest states for American whiskey sales are California, Texas, Florida, New York, and Michigan.

While the average bourbon consumer might be a millennial male, retailers are quick to point out that both men and women of varying ages are shopping for bourbon in their stores. “We see a mix of both genders and ages — anywhere from 21 to 45,” says Saraff. The older customers, he says, are the ones buying premium bourbons. 

Saraff notes, as well, that in-store customers are more willing to experiment with products from newer craft distilleries. “The bourbons that sell the most on Drizly, however, are the ‘popular’ brands.” He lists Bulleit, Woodford Reserve, Wild Turkey, Larceny, and Four Roses as examples. “In our store, those are all still very popular brands, but we sell a lot more craft whiskeys and our own private barrel picks.” 

At Justin’s House of Bourbon, Sloan says the majority of customers are men ages 25 to 65. But they’re not the only ones shopping and collecting. “We’ve also seen a huge number of women in their 30s to 60s being interested in bourbon and collecting vintage whiskey,” he says. Premium bourbons, in general, are also gaining more traction. “Five years ago, if you’d told me that there’d be a $199 bottle on the shelf that we can sell 70 cases of in five or six months, I’d have said no way.” That’s not unusual with Scotch, he says, but most people still typically think of bourbon as a “value” product. 

Tips From Retailers for Maximizing 2020 Sales 

Saraff emphasizes the importance of looking at opportunity cost. He suggests evaluating your shelf space, along with whether replacing certain products with others will lead to increased revenue. “I also consider, does having this [product] give me an overall better and more impressive selection? If that answer is yes, sometimes it warrants us carrying it.”

Retailers, Saraff says, should always be thinking of tomorrow. “Trying to get ahead of the curve instead of catching up is always more beneficial,” he says. “For example, there were a lot of retailers who were not doing deliveries or didn’t have an online presence pre-Covid-19. Then when things started getting shut down, those retailers were the ones that were hurt the most. The best thing you can do to maximize your sales on Drizly is keep a wide selection, an accurate inventory, and make sure the products you want linked are visible on Drizly’s platform — and keep your rating high.” 

Nani recommends investing in premium bourbons and finding ways to highlight the selection in your store. “We have all our premium liquors in a locked glass display as soon as you walk in the door,” he says. “And anytime there’s an allocation available, take it,” he says. “Then try to turn it over as fast as possible.” Not only do you make your money back quicker, he explains, but you get a better history with wholesalers who say, “hey, these guys are really turning our stuff over, let’s allocate them more.” Finally, says Nani, make sure you stock the inventory that your customers want. Keep in mind that may be different in-store versus online.

“Overall,” says Sloan, “the third and fourth quarters are setting up to be good ones, even with on-premise bars opening … There’s going to be plenty of drinking.” He advises that if you’re going to “take that plunge and invest in bourbon, invest in a staff that knows the product and can educate consumers when they come in.” And don’t just bring in anything that the distributors tell you to bring in. “Taste it. Find out if it’s [generating] buzz.” If you don’t like bourbon, he says, get someone on your staff or someone in the bourbon community to help you. And finally, “Make smart buys,” he says. “If you make smart buys, you’ll be okay.”

Looking Ahead to Q3 and Q4

Even with the pandemic, bourbon had a stronger than average performance in the second quarter of 2020. “The category has retained similar market share to Q1, rather than the usual dip that begins in Q2,” says Paquette. “This could hint at a stronger Q3 for the category if similar consumer behaviors sustain.”

Historically, Drizly sees the worst performance for bourbon in the third quarter — and the best in the fourth quarter. “We do anticipate that bourbon will continue to retain sizable market share within both the spirits category and overall,” says Paquette. “We recommend ramping up inventory leading into Q4.” 

Brandy Rand, COO of the Americas at IWSR Drinks Market Analysis, says there are several factors that lead the IWSR to believe that U.S. whiskey volume overall will continue to grow in the U.S. “Among them,” she says, is increased category competition that’s led to the production of higher-quality products. Limited allocations will keep consumers engaged, and innovation within the distillation and production process is expected to continue. Additionally, investments in distilleries are allowing producers to meet projected future demand.” 

Nani expects that sales will keep going up too. People have been locked inside for much of the spring, he says, and once things start to loosen up a bit, “I think it’s going to even out, and bourbon sales will increase for all the right reasons.” 

When deciding how to invest in the product category with additional shelf space and inventory, Drizly suggests that retailers keep their investment relative. “We have not seen major gains from a share perspective year-over-year — it has been more of a steady climb.” 

Additionally, Paquette advises looking to the top sellers first. “Drizly Retail Partners get access to reports that show the top sellers on Drizly within each category in their area. Keep an eye on the brands that are experiencing higher than average growth, says Paquette. 

These bourbon brands, for example, experienced an outpaced increase in sales on Drizly during the Covid-19 crisis:

  1. Old Forester
  2. High West
  3. Redemption
  4. Old Fitzgerald
  5. Jefferson’s
  6. Noah’s Mill
  7. Willett
  8. Belle Meade
  9. Balcones
  10. George T. Stagg

“We recommend that our partners invest in the top sellers first and foremost to help increase their conversion rate,” says Paquette. In addition to showcasing new and upcoming brands that are potentially unique to your store, this will help diversify your presence on Drizly’s platform. 

With all the havoc Covid-19 wreaked around the globe, perhaps one silver lining is that it hasn’t negatively affected the outlook for retail sales of bourbon this year. “Bourbon,” says Paquette, “remains a reliable investment during this uncertain time period, particularly as many consumers are leaning on trusted brands and categories, and trying more cocktails at home.