BevAlc Insights’ 2023 Bourbon Forecast
Premium SKUs and reliable brands are driving value and volume growth for this staple whiskey category
Bourbon is America’s spirit, and it’s been a consumer favorite for more than a decade. In 2022, bourbon was the fourth-largest subcategory overall sold on Drizly (following red wine, white wine, and vodka). This position has held steady over the past five years, with the end of each year being a strong sales period for bourbon. However, a set of well-loved core brands and the appeal of flavored options and new SKUs mean the spirit will continue to be a key component of any off-premise inventory year-round.
A Historically Strong Category With Premium Growth
“Bourbon has been on an upward growth trajectory and continued to grow year-on-year in both volume and value terms even during the pandemic,” says Brandy Rand, the chief strategy officer at IWSR Drinks Market Analysis. “The compound annual growth rate (CAGR) for bourbon in the U.S. between 2016 and 2021 was plus eight percent in volume terms and plus 11 percent in value as more premium offerings gain share. The continued rise of cocktail culture has helped broaden the appeal of the category to more consumers as well.”
Within the whiskey category, bourbon was the top-selling subcategory in 2022 with a 39 percent share of whiskey sales on Drizly. Over the past five years, it has steadily grown, holding a 36 percent share in 2018, 37 percent share in 2019, 39 percent share in 2020, and a 38 percent share in 2021. The only other whiskey subcategory that saw share gains in the past year was Canadian whisky.
Bourbon sales follow a broader trend seen across multiple liquor subcategories: premiumization. “Premiumization is a key factor driving the bourbon category,” says Rand. “Value growth is outpacing volume growth which indicates a higher spending trend.”
2022 saw the highest average unit price for bourbon on Drizly in the past five years at $40.48. That’s up from $34.65 in 2018 – a 16.8 percent increase.
“In recent years, bourbon has been one of the liquor subcategories most impacted by premiumization,” says Liz Paquette, Drizly’s head of consumer insights. “The average unit price continues to grow year-over-year. Additionally, all the price ranges from $50 and above have gained share year-over-year over the lower price ranges.”
The higher end of the price spectrum of bourbon average unit price on Drizly has seen notable year-over-year growth. The share of bottles $100 or more rose from a 10.5 percent share in 2021 to a 12.2 percent share in 2022. Other higher price segments $50 and above rose as well, with the $90 to $100 range going from a 1.9 percent share to a 2.2 percent share; $80 to $90 range going from a 2.3 percent share to a 2.6 percent share; $70 to $80 range going from a four percent share to a 4.4 percent share; $60 to $70 range going from a seven percent share to a 7.7 percent share; and the $50 to $60 range going from a 12.7 percent share to a 14 percent share.
Conversely, the share of bourbon sales on Drizly in every price bracket under $50 has decreased.
The share of bourbon sales for bottles between $20 and $30 decreased from 21 percent to 18 percent year-over-year, while the share of sales in the $50 to $60 range increased from 12 percent to 13 percent. The share of bourbon sales for bottles between $60 and $100 all increased slightly as well, while the share of sales for bourbons more than $100 increased from six percent to nine percent.
Outside of whiskey, a rising percentage share of tequila sales competes with the top whiskey subcategories. Neither tequila nor the other whiskey subcategories meet bourbon’s overall share of sales, however.
How the Bourbon Market Has Changed
“A lot of brands that used to be relatively easy to buy are now on allocation,” says Rand. “This is due to both supply issues as well as consumer demand for popular brands that have a reputation for quality and value. Consumers are more educated on the bourbon category and are looking to explore across the brands they know as well as to discover new brands. Limited releases are also driving more interest fuelled by social media and scarcity, more and more bourbon fans are looking to get bottles that no one else can.”
The list of top-selling bourbon brands on Drizly is relatively stable. In the past year, Maker’s Mark surpassed Bulleit as the top-selling bourbon brand on Drizly. Additionally, Angel’s Envy replaced Knob Creek in the number 10 position.
Drizly’s Top-Selling Bourbons in 2022
- Maker’s Mark
- Woodford Reserve
- Jim Beam
- Basil Hayden
- Four Roses
- Evan Williams
- Buffalo Trace
- Angel’s Envy
The reliability of the top-selling brands makes it easy for retailers to stock a variety of SKUs from popular bourbon brands to maximize sales. Additionally, many of the top-selling brands have SKUs at various price points to capitalize on the sale of premium and super-premium bottles.
Drizly’s Fastest-Growing Bourbons in 2022
- Four Roses Bourbon
- Four Roses Small Batch Bourbon
- Four Roses Single Barrel Bourbon
- Michter’s US 1 Kentucky Straight Bourbon
- Maker’s French Oaked 46 Bourbon Whisky
- Four Roses Small Batch Select Bourbon
- Hudson Bright Lights, Big Bourbon Whiskey
- Weller 12 Year Bourbon
- Booker’s Bourbon Whiskey
- Bulleit Old Fashioned Cocktail
- Jefferson’s Reserve Bourbon
- Jefferson’s Very Small Batch Bourbon Whiskey
- Basil Hayden Subtle Smoke Kentucky Straight Bourbon Whiskey
- High West American Prairie Bourbon
- High West Bourbon Whiskey
Who’s Buying Bourbon?
In 2022, millennials commanded the largest share of bourbon sales (52 percent, compared to 50 percent of overall Drizly sales) followed by Gen X (36 percent, compared to 35 percent of overall Drizly sales), baby boomers (13 percent, compared to 14 percent of overall Drizly sales), and Gen Z (two percent, compared to three percent of overall Drizly sales).
In 2022, the top markets that over-indexed on bourbon share relative to overall share of sales on Drizly included Dallas, Chicago, Washington, D.C., Atlanta, Houston, and Austin.
Looking Ahead to 2023
Bourbon is a reliable sales driver and will continue to bring in consumers. IWSR Drinks Market Analysis predicts that the CAGR for bourbon will be plus five percent in volume and plus eight percent in value between 2021 and 2026.
“IWSR forecasts bourbon sales to increase in 2023,” says Rand. “In 2016, bourbon held 26 percent volume share of the whiskey market in the U.S. In 2021, this had grown to a 30 percent share and IWSR forecasts it to grow to a 31 percent share by 2026. The level of investment by multinationals in bourbon production and storage facilities in order to meet growing demand points to a very positive future.”
Bourbon has historically had its lowest performance in the third quarter on Drizly. That’s quickly followed by the fourth quarter, which is the strongest performer. That’s one major reason to steadily ramp up inventory going into Q4, starting with the top-selling bourbon brands on Drizly while keeping an eye on rising SKUs and new formats like ready-to-drink cocktails.
“Both are important for retailers to consider when planning their bourbon inventory,” Paquette says. “While the tried and true top-sellers are essential for retailers to have in stock to attract consumers seeking those specific products, having lesser-known and innovative SKUs is also a great way to stand out among the competition and attract consumers looking for something new in the bourbon category.”