How to Optimize your Entry-Level Spirits Selection
Premiumization in other liquor categories has allowed vodka to shine in the entry-level price point
Entry-level spirits SKUs — think: Tito’s, Bacardi, and Jack Daniel’s — will always have a place on the shelves of alcohol retailers, but a noticeable shift is occurring as more consumers are trading up in their spirits purchases.
In 2021 to date, 37 percent share of liquor purchases on Drizly fall within an entry-level price range ($10 to $30). While this is still quite significant, this is down slightly from 38 percent in 2020 and, more dramatically, 44 percent in 2019.
Liz Paquette, Drizly’s head of consumer insights, says this downward trend is “a result of premiumization, which has driven share shifts in the liquor category over the past few years.”
Therefore, it’s more important to not just have any entry-level spirits SKUs on retail shelves, but to have the right ones. “It remains essential for retailers to have the top-selling, entry-level SKUs in stock to attract new customers and build profitable baskets, both in-store and online,” explains Paquette.
To help retailers optimize their entry-level inventory, we took a look at the top-performing categories, SKUs, and age demographics for this price point and spoke with a pair of Drizly retailers about what they’ve found to be most successful.
Drizly’s Top-Selling Entry-Level Spirits Brands, 2021 to Date
- New Amsterdam
- Jim Beam
- Jack Daniel’s
Vodka Leads Entry-Level Sales
Vodka is the one spirits category that has seen share gains within the entry-level segment year-over-year; entry-level vodka is up two percentage points in share. Both bourbon and American whiskey, on the other hand, have declined by one percentage point in share each.
These shifts can be attributed in part to premiumization trends in the spirits industry. In certain spirits subcategories, consumers are trading up for more premium offerings. “The vodka category has been less impacted by the premiumization trend than bourbon and tequila, which have seen share shift away from the entry-level price category,” explains Paquette.
“Consumers are losing slight interest in entry-level priced bourbons since the difference in quality is significant,” says Adam Rogers, North American research director at IWSR Drinks Market Analysis. “Craft brands, which generally hold a higher retail price, are also making consumers more accustomed to higher prices.”
Vodka’s share of the entry-level spirits category is also bolstered by flavored vodka, a growing subcategory where the majority of products fall into the entry-level price point. “This is being driven by younger legal-drinking-age consumers who are more familiar with flavor, due to the number of hard seltzer flavors in the market,” says Rogers. “It’s a natural transition which bodes well for the flavored vodka category.”
Matt Wluka Switkes, director of operations at Bauer Wine & Spirits in Boston, says that flavored vodka is his best-selling entry-level spirits category because “you can mix and create so many different cocktails.”
Overall, the top-selling entry-level spirits are fairly consistent year to year and continue to be reliable sellers for retailers. In keeping with Drizly data, Simon Isaac, owner of Paradise Liquor Mini Mart in Phoenix, AZ, confirms that his top-selling spirits category for entry-level spirits is vodka, with Tito’s being his top performer. Absolut Vodka is a new entrant to Drizly’s top-performing entry-level spirits list, further proof of vodka’s domination.
“The best-selling entry-level spirits on Drizly year over year have been stable and are made up predominantly of household names and national brands,” says Paquette. “Retailers can optimize their entry-level spirits without taking up too much shelf space by prioritizing top sellers.”
Drizly’s Top-Selling Entry Level Spirits SKUs, 2021 to Date
- Tito’s Handmade Vodka
- Smirnoff No. 21 Vodka
- SVEDKA Vodka
- Jameson Irish Whiskey
- Fireball Cinnamon Whisky
- Espolòn Tequila Blanco
- BACARDÍ Superior White Rum
- Jim Beam Bourbon Whiskey
- Captain Morgan Original Spiced Rum
- Absolut Vodka
Who’s Buying Entry-Level Spirits?
Drizly data shows that two generations are over-indexing on entry-level spirits share relative to the overall Drizly average: Gen Z and Baby Boomers.
“The lower price point may appeal to Gen Z, which is the youngest generation,” says Paquette. “Additionally, the household brands and nostalgia associated with the brands that lead the entry-level category appeal among Baby Boomers.”
Isaac says that entry-level spirits at his store are most popular with consumers between the ages of 21 and 30, while Wluka Switkes says it’s between 21 to 34.
Optimizing Entry-Level Spirits Sales
While entry-level spirits account for a significant portion of alcohol sales, retailers also don’t want them cutting into potential sales at a higher price point. Thus, the art of stocking entry-level spirits can be a tricky one. Should retailers stock multiple SKUs in each category, or just a few?
For his part, Isaac focuses on keeping a variety of selections within each category and suggests that retailers “carry all products” in order to appeal to the masses.
Wluka Switkes stocks a few entry-level options for each category in order to cater to consumers who “have never had a specific spirit, but would like to try it and not spend too much on something they do not even know they will like.”
“It helps build other categories that may not be as popular as vodka or tequila,” he adds.
Rogers suggests that retailers strategize based off of premiumization trends. “Vodka should have multiple entry-level products while bourbon and tequila should keep it limited since the attention in those categories is at the higher end,” he says.
Ultimately, how each retailer goes about stocking entry-level spirits largely depends on inventory space and market-level trends. Drizly Retail Partners can look to their reporting tools to determine which brands are best-sellers in their market.
Further, retailers can build off of entry-level spirits sales by stocking their online store with the usual accompaniments. “From an online inventory perspective, we would recommend retailers have other items in stock that are often sold with entry-level spirits — including extras like mixers, soda, juice, etc. — as well as supporting categories that appeal to the same consumer groups, for example, hard seltzer,” says Paquette.
Wluka Switkes recommends taking additional steps to educate the consumer and guide them towards the right choice. “Make sure you have a good sign with tasting notes to help the consumer [discover] what it would go with best,” he says. “Have staff educated on the brands and why someone would want to choose the practical product. Knowledge is power.”