Knob Creek bourbon, produced by Beam Suntory, has restored the nine-year age statement on its bottles. Also revised its label design, and began selling 12- and 15-year versions of its whiskey in the previous three years. The price of a bottle used to range from $25 to $50, but now it may cost anywhere from $36 to nearly $200.
All of this is part of Beam Suntory’s plan to transition to higher-end spirits. It’s paying off for the corporation, as sales increased by 11% in 2021. Customers are less sensitive to price increases to combat inflation as they pay more for their alcohol.
Sales in the United States increased by double digits in 2021, owing to strong demand for the company’s premium spirits. Sales from wholesalers to retailers, which show real-time consumer demand, increased by double digits over the year, according to the business.
Bowmore Scotch whisky, for example, is a success story for the company’s high-end approach. With the volume up 16 percent and sales up 50 percent. To boost its profile, the company has collaborated with Aston Martin on multiple occasions. This includes the creation of one of the world’s most exclusive single malt whiskies in 2020. In December, a bottle of Bowmore whisky sold for a record $532,340 at the Distillers’ One of One charity auction. Thus, confirming the brand’s perceived worth for a rare whisky.
Beam Suntory’s global sales increased 11% in 2021 compared to the previous year and during the previous two years. Unlike many of its publicly traded competitors, the company is not obligated to reveal its financial data because it is privately held.
For example, Diageo recorded a 20% increase in organic sales in the first half of fiscal 2022 compared to the same period the previous year.
Despite its excellent sales, Beam Suntory faced many of the same issues as the rest of the spirits industry. Sales in Japan increased by the mid-single digits, but demand was hampered by government limitations. Glass shortages have hampered the availability of several Jim Beam bottle sizes. Inflation also took a toll on profitability.
Baladi added that to cover increasing costs, several of its brands hiked their prices twice in 2021. And its American whiskey portfolio led the industry in price hikes.
Although Baladi pointed out that the spirits market does well in most economic scenarios. The company hasn’t witnessed any changes in consumer demand for its more expensive bottles so far. According to Baladi, increasing prices encourages the company to continue its efforts to improve its spirits.
Rates In 2022
Baladi said the business is considering boosting rates again in 2022. The consumer price index rose 7.5 percent in January compared to the same month a year ago, exceeding the company’s inflation forecast.
According to the Distilled Spirits Council of the United States, premixed cocktail sales grew at the quickest rate of any alcohol category last year.
Beam Suntory teamed with Sam Adams brewer Boston Beer to introduce each company’s brand into new categories as part of its drive to expand its ready-to-drink products. Beam Suntory’s Sauza brand will begin delivering ready-to-drink cocktails in March, while Truly Vodka will be available in March and April.