31 January 2024, Austin, Texas: Another year another dollar. With the mixed events of 2023 how did the Texas on-premise beverage alcoholic channel perform?
With most our data sources fully reporting, we’re able to review 2023 to uncover some highlights and possible trends that may continue to express themselves into 2024.
The channel, which includes Beer, Spirits, and Wine sales in more than 19,000 on-premise outlets in the state continues to grow past the $10B/year mark in consumer spending, with consumers spending 5.5% more in this channel in 2023 than 2022.
Dollar growth continues to be driven by Spirits capturing a greater share of the total $10B by 0.3% over last year and represents $6 of every $10 spent in the channel.
Competition on-premise for restaurants, bar owners, and other operators has intensified over the year, as the average number of accounts selling Spirits in the channel increased by 4.5% year over year
Additionally, the average price per Spirit case purchased by operators grew by 2.8% in 2023.
Spirit volume purchased into the channel grew 3.2% in 2023. However, with the increase cost of goods and accounts, there does not seem to be sufficient consumer growth to sustain this level of new account growth to the market long term unless consumer spending increases in the channel.
Diving into the Spirits sector of the channel, where yDrink data is very comprehensive, we see some interesting trends present themselves over 2023:
Tequila is still hot and is not only the largest on-premise spirit category in Texas but continues to grow. Tequila increased both case volume shipped and price per case more significantly (+5.5%) than other categories (+1.2% combined non-tequila) in 2023.
By far the hottest growth category on-premise continues to be Spirit-based ready-to-drink offerings or RTDs. Volume for RTDs grew 74% over 2022, increasing its overall share of spirit volume in the channel from 3.3% to 5.5%. However, placement growth remained in line with Texas account growth while dollars per case spent on RTDs decreased by 1.6% year over year.
As for the other categories of Spirits, most did well but there are always winners and losers:
Shipments of Brandy (-3.9%), Rum (-5.0%), Vodka (-0.6%), and Whiskey (-1.5%) all saw volume declines in 2023 relative to 2022. Liqueur (+1.8%) and Gin (+1.8%) saw modest increases year over year, but overall volume growth was primarily driven by Tequila (+4.2%) and RTD (+74.4%).
Dollar value shipped tells a slightly different story, with Brandy (-3.8%) and Rum (-2.2%) as the only decreases in dollars purchased year over year. All the other categories saw expenditure increases from a range of 2-10%, and RTDs grew total dollars shipped by 71.6%. However, RTDs were the only Spirit category to see their average cost per case decline in 2023.
We hope you have enjoyed our 2023 Review of the on-premise channel in Texas. We look forward to reporting on 2024 next year for you!
yDrink, an Austin based company, has been reporting on-premise Texas beverage alcohol data and is celebrating 20 years this year. yDrink offers account level data for every outlet in Texas selling spirits conjoined with comprehensive shipment and market data for products and their competitive sets. www.ydrink.net