USA. A new report from IWSR has revealed that craft spirits now account for 3.3% of the total US spirits industry. Last year’s sales increase of 1.5 million nine-litre cases of craft spirits contributed 31.1% of category growth, according to the drinks analyst.

The U.S. Craft Spirits Report 2018 shows that craft spirits continue to significantly outperform the overall spirits industry in terms of both volume and value growth. From 2010 through 2017, the CAGR for overall spirits volume was +2.8%, while the CAGR for craft spirits was +25.8%.

Looking ahead to 2022, total spirits volumes are forecast to perform at a CAGR of +2.1% in comparison to craft’s +22%, according to IWSR’s research.

Sales of 580,000 nine-litre cases of US craft whiskey made up 36.9% of the overall US whiskey growth in 2017. Other craft categories contributing significantly to the growth of their parent categories include vodka (51.6%) and brandy (32.9%).

Tito’s Handmade Vodka is among the brands that helped craft vodka make up 51.6% of overall US vodka category growth in 2017.

US craft whiskey, including all sub-segments of Bourbon, blended, rye, Tennessee, other US, single malt and moonshine, increased by +28.1% in 2017, to hit 2.6 million nine-litre cases, according to the figures released by IWSR.

This category is forecast to reach 7.8 million cases by 2022 on a CAGR of +24.3%. US whiskey held a 35.3% share of total craft spirits by volume and 42.8% by off-premise value last year. Among the brands tracked by the IWSR, the average US craft whiskey brand retails for US$40.52.

IWSR’s report reveals that craft Bourbon holds the largest share of US craft whiskey market, with a 46.4% share of volume and a 45.7% share of off-premise value. The craft Bourbon category surpassed the 1 million nine-litre-case mark in 2017, with a 41.9% growth rate. Craft Bourbon is forecast to add another 2.4 million nine-litre cases by 2022, surpassing 3.6 million cases in total.

Despite the scale of this craft whiskey growth, IWSR does not consider this particular category as crowded. However, the drinks analyst said that product differentiation in moonshine, vodka, liqueurs and, to some extent, rum and gin, are needed for these categories to stand out.

IWSR also revealed the craft spirit sector categories that it believes to be “untapped”. These emerging categories include agave-based spirits, aquavit and soju. It also noted that consumer interest and demand for tequila and mezcal are not showing any signs of slowing.

Taking the crafts spirits sector as a whole, IWSR said there are decades to go until any saturation point is reached. It qualified this by highlighting that the number of distilleries per capita (10.6 per 1,000 adults) is still dwarfed by breweries (37.3).

Note: The IWSR U.S. Craft Spirits Report 2018 uses select results from the Craft Spirits Data Project, a collaborative project led by the American Craft Spirits Association, Park Street and the IWSR.