Spirits RTD Label Approvals slow from 2021 Highs But Still Many New Entrants

We received a recent request on Twitter to provide an update on an article from last year on Seltzer/RTD label approvals. With recent slow-downs in selzter’s growth, it made sense to provide an update. Label approvals for seltzer products have decelerated from 2021 highs.

Currently, in 2022, approvals are trending at 208 per month versus 276 approvals per month in 2021 (the TTB approved 3,315 labels in 2021 in total and has already approved 1,042 in 2022). Since 2019, the TTB has approved 8,864 labels. These numbers are also an undercount as not all beer/malt-based seltzers require a COLA from the TTB.

Spirits-based products have stabilized trends at around 200 label approvals per month. Beer-based approvals are decelerating while wine-based approvals show slight signs of acceleration.

Vodka is the leading base spirit of label approvals in 2022 (YTD through May) with Tequila/Agave and Whiskey/Bourbon not far behind. Gin and Rum products continue to trail significantly as a base spirit.

Citrus-based flavors tend to dominate the field (including, Lime, Lemon, Orange, and Citrus) coupled with the generic, Fruit offering. In addition to flavors, also visible are typical RTDs and mixed drinks including Margarita, Mule, Mojito, and Martini.

All of this information was compiled using bw166’s Label Inquiry application. Please visit our Introducing Label Inquiry page for more details.

Beer, Spirits, & Wine – Packaged Imports Grow +20% By Value L12M through January 2022; Packaged Exports Grow +13%

Total Beverage Alcohol:

  • Total beverage alcohol imports (including bulk and packaged) grew +18% by value over the last twelve months and grew +10% by value over the last three months. 36% of all imported beverage alcohol by value came from Mexico over the last twelve months.

  • Total beverage alcohol exports (included bulk and packaged) grew +15% by value over the last twelve months and grew +32% by value over the last three months. 29% of all exported beverage alcohol by value went to Canada over the last twelve months.

Each of the bw166 Import and Export Reports (for Beer, Spirits, and Wine) enable tracking Beverage Alcohol imports and exports on a monthly basis for volume, value in USD, and value in local currency for all major trading countries.

Beer:

  • Imported beer grew +7% by volume and grew +9% by value over the last twelve months. Over the last three months, imports declined -3% by volume and declined -2% by value. 77% of imported beer by value comes from Mexico.
  • Exported beer grew +12% by volume and grew +36% by value over the last twelve months. Over the last three months, exports declined -19% by volume and declined -20% by value. 24% of exported beer by value goes to Chile.

For more details regarding imported and exported beer across all countries, subscribe to the bw166 Beer – Imports and Exports report.

Spirits:

  • Imported packaged spirits for the last twelve months grew +14% by volume and grew +23% by value. Over the last three months, volumes grew +8% and grew +21% by value.
  • Imported bulk spirits for the last twelve months declined -11% by volume and declined -22% by value. Over the last three months, volumes declined -12% and declined -23% by value.
  • 36% of all imported packaged spirits by value arrived from Mexico while 32% of all imported bulk spirits by value arrived from Mexico.
  • Exported packaged spirits for the last twelve months grew +15% by volume and declined -2% by value. Over the last three months, volumes grew +30% and grew +27% by value.
  • Exported bulk spirits for the last twelve months grew +14% by volume and grew +22% by value. Over the last three months, volumes grew +81% and grew +62% by value.
  • 18% of all exported packaged spirits by value is destined for Canada while 35% of all exported bulk spirits by value is destined for Canada.

For more details regarding imported and exported spirits including detailed category breakdowns across all countries, subscribe to the bw166 Spirits – Imports and Exports report.

Wine:

  • Imported packaged wine for the last twelve months grew +14% by volume and grew +28% by value. Over the last three months, volumes grew +0% and grew +15% by value.
  • Imported bulk wine for the last twelve months grew +18% by volume and grew +18% by value. Over the last three months, volumes grew +13% and grew +2% by value.
  • 34% of all imported packaged wine by value arrived from Italy while 23% of all imported bulk wine by value arrived from Chile.
  • Exported packaged wine for the last twelve months grew +18% by volume and grew +23% by value. Over the last three months, volumes grew +5% and grew +6% by value.
  • Exported bulk wine for the last twelve months declined -24% by volume and declined -26% by value. Over the last three months, volumes declined -22% and declined -17% by value.
  • 38% of all exported packaged wine by value is destined for Canada while 58% of all exported bulk wine by value is destined for the United Kingdom.

For more details regarding imported and exported wine including detailed category breakdowns across all countries, subscribe to the bw166 Wine – Imports and Exports report.

Beer, Spirits, & Wine – Packaged Imports Grow +19% By Value L12M through December 2021, Packaged Exports Grow +10%

Total Beverage Alcohol:

  • Total beverage alcohol imports (including bulk and packaged) grew +17% by value over the last twelve months and grew +10% by value over the last three months. 35% of all imported beverage alcohol by value came from Mexico over the last twelve months.

  • Total beverage alcohol exports (included bulk and packaged) grew +12% by value over the last twelve months and grew +25% by value over the last three months. 28% of all exported beverage alcohol by value went to Canada over the last twelve months.

Each of the bw166 Import and Export Reports (for Beer, Spirits, and Wine) enable tracking Beverage Alcohol imports and exports on a monthly basis for volume, value in USD, and value in local currency for all major trading countries.

Beer:

  • Imported beer grew +8% by volume and grew +11% by value over the last twelve months. Over the last three months, imports declined -3% by volume and declined -1% by value. 76% of imported beer by value comes from Mexico.
  • Exported beer grew +13% by volume and grew +41% by value over the last twelve months. Over the last three months, exports declined -13% by volume and declined -13% by value. 25% of exported beer by value goes to Chile.

For more details regarding imported and exported beer across all countries, subscribe to the bw166 Beer – Imports and Exports report.

Spirits:

  • Imported packaged spirits for the last twelve months grew +15% by volume and grew +22% by value. Over the last three months, volumes grew +7% and grew +18% by value.
  • Imported bulk spirits for the last twelve months declined -11% by volume and declined -23% by value. Over the last three months, volumes declined -24% and declined -34% by value.
  • 36% of all imported packaged spirits by value arrived from Mexico while 32% of all imported bulk spirits by value arrived from Mexico.
  • Exported packaged spirits for the last twelve months grew +12% by volume and declined -8% by value. Over the last three months, volumes grew +29% and grew +12% by value.
  • Exported bulk spirits for the last twelve months grew +10% by volume and grew +19% by value. Over the last three months, volumes grew +75% and grew +55% by value.
  • 18% of all exported packaged spirits by value is destined for Canada while 33% of all exported bulk spirits by value is destined for Canada.

For more details regarding imported and exported spirits including detailed category breakdowns across all countries, subscribe to the bw166 Spirits – Imports and Exports report.

Wine:

  • Imported packaged wine for the last twelve months grew +14% by volume and grew +25% by value. Over the last three months, volumes grew +2% and grew +19% by value.
  • Imported bulk wine for the last twelve months grew +18% by volume and grew +26% by value. Over the last three months, volumes grew +7% and grew +17% by value.
  • 34% of all imported packaged wine by value arrived from Italy while 22% of all imported bulk wine by value arrived from Chile.
  • Exported packaged wine for the last twelve months grew +18% by volume and grew +21% by value. Over the last three months, volumes grew +13% and grew +6% by value.
  • Exported bulk wine for the last twelve months declined -25% by volume and declined -28% by value. Over the last three months, volumes declined -38% and declined -38% by value.
  • 39% of all exported packaged wine by value is destined for Canada while 58% of all exported bulk wine by value is destined for the United Kingdom.

For more details regarding imported and exported wine including detailed category breakdowns across all countries, subscribe to the bw166 Wine – Imports and Exports report.

Spirits Lead the Acceleration in Seltzer/RTD Label Approvals

Label approvals for seltzer and seltzer-like products continue to accelerate in 2021. Currently in 2021, approvals are trending at 334 per month versus 228 approvals per month in 2020 (the TTB approved 2,002 labels in 2020 in total and has already approved 2,741 in 2021 through June). These trends continue to point to increasing fragmentation in the seltzer/RTD space and, clearly, many companies are chasing their share of seltzer’s phenomenal growth.

This acceleration in label approvals is driven almost entirely by Spirits-based products. Wine and Beer are seeing positive trendlines in approvals but nothing like Spirits products.

Vodka is the leading base spirit of label approvals in 2021 (YTD through June) with Whiskey/Bourbon and Tequila/Agave roughly tied for second. Gin and Rum products trail significantly behind (perhaps this is a manifestation of the overall popularity, or lack thereof, of these categories at large).

Citrus-based flavors tend to dominate the field (including, Lime, Lemon, Orange, and Citrus) coupled with the generic Fruit offering. In addition to flavors, also visible are typical RTDs and mixed drinks including Margarita, Mule, Manhattan, and Daiquiri.

More and more players continue to enter (or expand their existing portfolios) this space. Looking to the large spirits players alone, we’ve seen label approvals this year such as:

  • Absolut Vodka Soda – Lime & Cucumber, Raspberry & Lemongrass (all 2/10/21)
  • Bacardi – Bahama Mama (5/21/21), Mojito (4/22/21), Rum Punch (4/22/21), Sunset Punch (6/8/21)
  • Bombay Bramble Gin and Tonic – Blackberry & Raspberry (4/7/21)
  • Captain Morgan – Long Island Iced Tea (2/24/21), Mai Tai (2/28/21), Tropical Punch (2/18/21)
  • Casamigos Ranch Water – Grapefruit, Lime, Mango, Pineapple (all 3/3/21)
  • Crown Royal – Peach Tea (5/3/21), Whisky and Cola (3/8/21), Washington Apple (3/5/21)
  • Jose Cuervo Playamar – Mango (2/18/21), Black Cherry (2/18/21), Lime (1/27,21), Grapefruit (1/27/21)
  • Malibu Cocktail – Watermelon Mojito, Strawberry Daiquiri, Pina Colada, Pineapple Bay Breeze (all 3/24/21)
  • On The Rocks Cocktails (by Beam) – The Manhattan with Basil & Harden, The Old Fashioned with Knob Creek, The Aviation with Larios, The Mai Tai with Cruzan (all 6/8/21), The Margarita with Hornitos (6/15/21)

This above list represents a small handful of the many label approvals sought and granted to other suppliers all vying to break into this space.

All of this information was compiled using bw166’s Label Inquiry application. Please visit our Introducing Label Inquiry page for more details or contact us at admin@52.37.17.222 if you have any questions on how this application can benefit your organization.

Indicators on Supplier Closures and Trends in 2020

The past year has been chaotic. Between pandemic-related shutdowns and wildfires in California, the beverage alcohol industry has faced a gamut of challenges across all three tiers. With this article, we wanted to look at the effect on the supplier tier superficially. With many smaller suppliers dependent upon on-premise sales (through tasting rooms, brewpubs, and distilleries), it’s logical to surmise the industry would see increased supplier closures similar to the results in the on-premise.

Using bw166’s Label Inquiry tool, we’ve compiled data on how many suppliers have submitted COLAs to the TTB from 2016 through 2020. This data allows us to identify suppliers that have consistently filed COLAs year over year, when suppliers have first filed COLAs, and identify suppliers that filed previously but not in the current term. While there are limits to this dataset (i.e., not all beer products require a TTB COLA), the consistent measurement over time allows for a reasonable degree of confidence in the results.

Beer –

  • From 2016 through 2019, the Beer industry consistently showed an increasing number of suppliers – from 1,650 in January 2016 to 2,430 in January 2020. However, 2020 is the first year of declines – falling to 2,250 in December 2020. This decline of -9% in breweries is likely understated (as using a rolling 12-month figure (to smooth seasonality) doesn’t reflect nearer-term closures.

  • New beer suppliers spike in early 2018 and have declined since, with a more pronounced decline in 2020. In January 2020, there were 800 new suppliers versus only 630 in December 2020 (this was roughly the level of new entrants in 2016).

  • Overall, the number of lost beer suppliers continues its upwards trajectory. Interestingly, we have not seen a significant increase in closures during 2020 (though this may again be affected by looking at 12 months of data).

Spirits –

  • The Spirits industry has shown a significant increase in supplier count since 2016 – rising from 1,000 in January 2016 to 1,660 in December 2020. Through 2020, the number of suppliers has continued to increase (albeit with a slight decline from 1,700 in November 2020 to close out the year – though this may just be volatility in measurement than reflective of significant changes)

  • The number of new spirits suppliers steadily increased between 2016 and 2020. During 2020, the number of new suppliers peaked at 660 in August and then fell to 630 in December – still near the high point historically and above the 600 new suppliers in January 2020.

  • Lost spirits suppliers have been steadily rising from 2016 through 2019 – starting at 250 in January 2016 and ending at 503 in December 2019. This trend has been reasonably stable throughout 2020 – staying just above or below that 500 supplier count (ranging between 470 and 520 during any particular month).

Wine –

  • Wine suppliers saw a steady increase from 2016 through 2019 (from 4,400 in January 2016 to 4,760 in December 2020), followed by a significant increase in early 2020 and then a decline to end the year in December. The probable explanation for these results, particularly the disconnected data in 2019, is attributable to the government shutdown in January 2019, which altered COLA approval patterns.

  • New wine suppliers showed a steady though slight positive increase from 2016 through 2019 – starting at 1,480 in January 2016 and ending at 1,580 in December 2019. The government shutdown explains the rapid rise in January 2020 (1,770 new suppliers). This shift also explains the apparent drop in new suppliers through 2020, ending at 1,580 in December 2020 – exactly in line with the historically stable numbers.

  • While lost wine supplier counts increased in 2020 (from 1,400 in January to 1,610 in December), these numbers are reasonably in range of historical results. The other unexplained facet is the potential effect of the California wildfires. With lost crops, a natural consequence would be delays or cancellations in new products, which may also explain this rise in lost suppliers.

Closing Thoughts

  • Overall, there does not seem to be a significant acceleration of closures in the supplier tier. Instead, the current data suggest a continuation of existing trends in terms of closures.
  • The more considerable impact in the supplier tier seems to present itself in the deceleration of new suppliers. Given economic and COVID-related uncertainty, it is logical that individuals would be hesitant to start a new venture.
  • If you found this article helpful or informative (or if not), send us a note at admin@52.37.17.222. If there’s enough interest, we can look at publishing an updated analysis in the future.

For more granular insights and data about Product Approvals, subscribe to the Label Inquiry by bw166 or visit our website at www.bw166.com.