Spirited Spending: Whisky Sales in an Uncertain Economy BY YVONNE LANGEN
Like the darkening sky before the first thunderclap, the threat of an economic recession foments in the offing leaving many of us to wonder how the whisky world will weather the storm. “In August of 2022, we did notice consumer behaviour change very sharply,” states Andrew Ferguson, Kensington Wine Market owner in Calgary Alberta. Demand for certain products in his store (which carries up to 1,800 identifiably unique whiskies each year) saw a precipitous decline, which he believes is due to several factors. “Inflation has really bit into people’s wallets, especially the middle class. With lending rates sharply rising and the cost of food and gas groceries costing much more; that leads to less spending on their favourite drinks”. Mr. Ferguson adds. Much has changed from the early days of the pandemic which Ferguson described as catalyzing “a big boom” for the whisky business. In 2020, one quarter of Canadians blamed their increased consumption on stress, boredom and lack of regular schedule*. Middle-class Canadians who kept their jobs were experiencing a newfound sense of wealth. Housing prices skyrocketed, interest rates plummeted, and those of us in lockdown were cut off from our usual experiential extravagances. When we were finally released on our own recognizance, albeit accessorized with N-95 masks and social distancing, we saw
an uptick in a phenomenon in what financial experts have termed “revenge spending” – buying things meant to make up for “lost time” after an event like a pandemic. For the first time ever - Beam Suntory Premium-plus spirits comprised more than half of total Full Bottle spirits sales and their 2022 full year results announced net sales up 10.5% year on year, representing a 24% growth versus the pre-pandemic year of 2019. “Coming out of COVID there was a great deal of residual income that wasn’t being spent and people started to premiumize their shopping selections at liquor stores.” says Beam Suntory luxury brand ambassador, James Neil. Yet according to Statistics Canada data, 2021-2022 saw the largest decline in year-over-year alcohol sales by volume in more than a decade – down 1.2% from the prior year. In the latter half of 2022, the economic realities of many Canadians began to shift as the eventual reckoning of all that revenge spending started to set it. By the beginning of 2023, a poll of 2,100 Canadian adults found that 72% of Canadians considered the rising cost of living as the top issue facing the nation and soon thereafter a follow up poll of 1,963 Canadians demonstrated that 48% thought the economic condition of the country would only worsen in the next 12 months.**
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the whisky explorer magazine
FALL 2023
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