American whiskey gains more fans overseas

The liquor industry appears to be unaffected by economic turmoil. Many people need a drink when times are bad, and they want to drink when they're prosperous. Fortunately, 2012 was a good year for U.S. distilled spirits -- which made significant progress both at home and overseas.

On Wednesday, the industry's trade association, the Distilled Spirits Council, announced overall U.S. supplier sales grew by a moderate 3% last year -- with supplier revenue up 4.5% as consumers gravitated to higher-end products.

"The premiumization trend continues to captivate consumers here in the U.S. and around the globe," said Peter Cressy, the Council's president and CEO, at its annual briefing.

Worldwide, sales of U.S. spirits have been good. The Council projects 2012 exports will soar to $1.5 billion in a third-straight year of record growth -- boosted by the continued appeal of top-shelf American whiskey to international consumers. Those U.S.-produced whiskeys make up nearly 70% of overall distilled spirits exports -- more than tripling U.S. beer exports and eclipsing wine exports by nearly $250 million.

Officials say policy changes, including recently reached free-trade agreements with South Korea, Panama and Colombia as well as a Permanent Normal Trade Relations accord with Russia, have also helped boost those export numbers. The growing number of middle-class consumers in Eastern Europe and Asia, Cressy says, has their own "cocktail culture," and these emerging markets are supplying American whiskeys with a new fan base.

The biggest U.S. spirits export market remains Canada, with nearly $200 million in sales last year, followed by Australia, the United Kingdom, Germany, France and Japan. But U.S. whiskey and other American-made liquors are making significant inroads in such Asian markets as China, India, Singapore, Vietnam and South Korea -- while showing strong growth in parts of South America and in Eastern European countries like Romania, Poland, Bulgaria and Latvia.

So-called craft distillers continue to grow in popularity, both overseas and domestically, to the point where the big companies are creating their own versions of craft brands.

"Any time you have an industry that is growing and is strong it allows the development of niche players. and that's what we're seeing with craft distillers," said David Ozgo, the council's chief economist, who notes the number of U.S. small-batch distillers -- who produce fewer than 100,000 bottles annually -- doubled between 2010 and 2012.

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