Increase in Beam Suntory’s sales, as the company shifts towards the premium segment
The latest Beam Suntory report shows an 11% increase in sales in 2021. Last year's sales were largely driven by the company's new strategy to gradually expand its premium segment. The owners of the company also announced further increases in alcohol prices in all categories.
Beam Suntory is increasingly opening up to the premium segment. In the last three years, their flagship Bourbon Knob Creek has re-launched a 9-year-old version of the drink, but has also started selling 12- and 15-year editions. While a few years ago the price of Knob Creek bottles was in the $ 25-50 range, now the Knob Creek brand has a price range of $ 36-200.
In the United States, the increase in sales was mainly driven by the phenomenon of premiumisation, i.e. the return of consumers towards higher-quality and higher-price spirits. A perfect example is the Bowmore Scotch whisky, whose sales volume increased by 16% in 2021 and the sales value increased by as much as 50%. The brand has introduced, among others, to the market in recent years. ultra-luxurious whisky in collaboration with Aston Martin.
However, the increase in alcohol prices is driving not only consumer demand, but also other market factors, such as inflation or price increases throughout the supply chain. To counterbalance these factors, Beam Suntory has been increasing prices in recent months, and company officials are already announcing further increases.
Despite rising prices, the company did not observe any changes in consumer demand in the premium segment, pointing to the historical resilience of the spirits industry in times of economic uncertainty.