Cheers: Whiskey sales start comeback in bars, restaurants

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Shelves display bottles of bourbons for sale at a Pennsylvania fine wine and spirits store, Saturday, Jan. 22, 2022, in Harmony, Pa. Despite ongoing challenges from the pandemic, American whiskey producers toasted another year of growth. Combined U.S. sales for bourbon, Tennessee whiskey and rye whiskey rose 6.7%, or $288 million, to $4.6 billion in 2021, the council said. Domestic volumes rose 4.5% to 29.7 million cases. (AP Photo/Keith Srakocic)

LOUISVILLE, Ky. | Bill Thomas sold off thousands of bottles from his whiskey inventory in 2020 to keep his acclaimed Washington, D.C., whiskey bar afloat when the coronavirus shuttered much of the economy.

By the next year, the whiskey curator known for serving super-premium and hard-to-get brands was replenishing inventories, even as COVID-19 forced him to come to terms with a world of uncertainty.

“There’s more bottles in here today than there were when we sold out when the pandemic hit,” Thomas, owner of Jack Rose Dining Saloon, said by phone this week. “We’ve rebuilt everything.”

Thomas’ restocked supplies reflect the start of a comeback for an important segment of the spirits industry’s business — on-premise sales from U.S. restaurants and bars.

Those on-premise sales volumes — representing about one-fifth of the U.S. spirits market — rose 53% in 2021, following pandemic-related restaurant and bar closures and restrictions nationwide in 2020, the Distilled Spirits Council of the United States said Thursday. The recovery isn’t complete. Last year’s on-premise sales were still down 14% from pre-pandemic levels in 2019, the council said.

Despite ongoing challenges from the pandemic, American whiskey producers toasted another year of growth. Combined U.S. sales for bourbon, Tennessee whiskey and rye whiskey rose 6.7%, or $288 million, to $4.6 billion in 2021, the council said. Domestic volumes rose 4.5% to 29.7 million cases.

Demand for super-premium brands, which fetch the highest prices, continued to surge last year, the council said. Super-premium volumes rose 15.6% in the bourbon, Tennessee whiskey and rye segment last year, the trade association said.

Industrywide, overall sales and volumes grew for U.S. distilled spirits suppliers, and the spirits industry again increased its share of the total beverage alcohol market, the council said.

“Consumers savoring spirits at home and trading up to higher-end brands, combined with the gradual reopening of bars and restaurants, resulted in record sales for the spirits sector,” said Chris Swonger, the council’s president and CEO.

Overall supplier sales in the U.S. were up 12% in 2021 to reach $35.8 billion, while volumes rose 9.3% to 291.1 million 9-liter cases, the council said in its annual report. Tequila was a key growth driver, accounting for nearly one-third of the total increase in spirits revenue, it said. Irish whiskey had a strong 2021, posting nearly 18% volume growth.

In 2020, as the spirits sector suffered from pandemic-related clampdowns on bars and restaurants, sales at liquor store and other retail outlets surged. Those off-premise sales reflected enduring demand for a good stiff drink, as consumers increasingly mixed their own drinks at home.

Last year, off-premise sales volumes were flat, but still good enough to be up 19% from 2019, the council said.

While waiting for his bar business to fully recover, Thomas has started capitalizing on the pandemic-era trend among consumers to increasingly mix their own drinks at home. He converted part of Jack Rose into a bottle shop that includes coveted single-barrel selections for take-home options.

And a pandemic-inspired twist for thirsty customers, in which restaurants serve cocktails-to-go, continues to take hold. Cocktails-to-go are now permanent in 16 states, while 14 more states extended their measures, the council said. Retailer home-delivery laws passed in eight states.

For his business, Thomas summed up 2021 as “the worst rollercoaster, finishing with a wreck at the end” as the omicron variant spread late in the year. This year remains a “complete uncertainty” as the threat from COVID-19 persists, he said, but he’s bullish about the long-term outlook as more spirits consumers gravitate toward whiskey.

“We know it’s going to come back,” he said. “We are optimistic. Whiskey is bulletproof, literally. The whiskey market is going nowhere but up.”

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