Luxury Spirits on the Rise

What exactly does “luxury” mean and why has it become such a popular selling point in the beverage alcohol industry? Find out the answers as we explore the rise of luxury spirits.

Between 2015 and 2020, the volume of luxury spirits being sold in the United States increased by 125% according to the Distilled Spirits Council of the United States (DISCUS). Clearly, there has been a recent shift in consumer behavior, which has increased the demand for high-end spirits and brands. In fact, luxury spirits have become such a large part of the industry that the Luxury Brand Index (LBI) was created to help track sales of spirits that cost $50+ per 750ml bottle. But what exactly does “luxury” mean and why has it become such a popular selling point? These are the questions we will be exploring as we look at the rise of luxury spirits.

What are Luxury Spirits?

When it comes to spirits, there are essentially 7 main types, including:

  • Gin
  • Whiskey
  • Vodka
  • Rum
  • Vermouth
  • Cognac
  • Tequila & Mezcal

So what exactly turns an average vodka into a luxury vodka that can be sold at a higher price?

While marketers have been known to try and hype products with exaggerated copy, fancy labels and packaging, and eye-catching bottles, savvy consumers can easily see through these marketing gimmicks. In today’s markets, consumers are interested in learning about and supporting craft brands and this trend is actually what is helping to redefine the idea of luxury spirits.

Those who are truly interested in luxury spirits are looking for a few main characteristics in the products they buy. Luxury products should be made using the finest craftsmanship and ingredients. The brand should also be authentic and provide details about the aging process, including how, where, and for how long. Of course, pricing and rarity will also play a factor in categorizing a spirit as luxury, but this is just one part of the equation. Luxury is about products made with quality and intention and not a bunch of smoke and mirrors.

The Growing Popularity of Luxury Spirits

The LBI defines luxury spirits as those that cost $50 or more per 750ml bottle. Only 3-4% of all spirits sold fall within this category and yet luxury spirits accounted for $10 billion in sales during 2020 and their popularity continues to grow. In the first half of 2021 alone, volumes of luxury spirits have increased by 25%. That is an annual growth rate of 17.7%, which is considerable, especially when compared to a 2.5% growth rate across all spirits.

You can break things down even further and look at how the different types of luxury spirits are performing. For instance, American whiskeys, including Tennessee Whiskey, rye, American single malts, and high-end bourbons grew 41% in 2020 to represent 6 million bottles sold. Part of this boom can be traced to tariffs that have made it harder for Scotch whiskys to compete in American markets.

Outside of American-produced spirits, Japanese whisky has experienced a meteoric rise in popularity with the segment enjoying a 42% growth rate between 2015 and 2020. Today, about 2 million bottles are sold per year.

Americans are also changing their perception of tequila. What used to be the shot of choice at college parties is now a popular luxury spirit. Enthusiasts appreciate 100% blue agave brands and have driven a growth rate of 30.7% between 2015 and 2020, with annual volume numbers peaking at  28 million bottles.

Cognac is the one spirit that has long been considered a luxury drink. It is well-established as a traditional luxury spirit and yet it has also experienced an annual growth rate of 16% and accounts for 29 million bottles a year.

Finally, Irish whiskeys are enjoying a resurgence after being hit hard beginning in the 1920s. Lately, this spirit has become a favorite among whiskey connoisseurs with an annual growth rate of 14% since 2015. 

The World’s Most Expensive Spirits

When it comes to luxury, there are a few brands that have taken this idea to new heights. If price is no object, you may be able to try one of these truly expensive bottles.

Billionaire Vodka – $3.7 million

No, that’s not the company’s valuation, that is the cost for a single bottle of their luxury spirit. Clearly, they weren’t joking around when they chose a name or brand motto, which is “It is good to be the king.” Each bottle is made by hand and on-demand using a secret Russian recipe. The 5-liter bottle is designed by Leon Verre, one of the most successful luxury designers in this era, and covered top to bottom in 3,000 diamonds and Swarovski crystals. It doesn’t get much more exclusive or expensive than Billionaire Vodka.

Tequila Ley .925 –  $3.5 million

While this tequila is priced at well over $3 million, a bottle has yet to be sold. Much of the price comes from the bottle itself, which is covered in 6,400 diamonds. However, the company claims that these improve the flavor. Since a bottle hasn’t been sold yet, there is a chance that the final price could be lower.

Henry IV Dudognon Heritage Cognac Grande Champagne – $2 million

Not only has this cognac been aged for 100 years, but it is also served up in a 24-karat gold-coated bottle that is then housed in platinum and covered in diamonds. Based on appearance, it is a luxury spirit designed with a conquering medieval king in mind. 

Russo-Baltique Vodka – $1.35 million

If you have a couple million to spare, you can enjoy a bottle that is designed to look like a vintage car crafted from 100% pure gold and embellished with inlaid diamonds. Part of what makes this a luxury brand is exclusivity. You will have to travel in elite circles to be able to snag a bottle.

Diva Vodka – $1 million

From most accounts, this brand is more about the diva and less about the vodka. After being filtered using traditional methods, the vodka is filtered again, but this time through precious gemstones. Each bottle features a glass tube in the center that is filled with Swarovski crystals. If you are just looking for a decent bottle of vodka, you can find a lot more options at a lower price point.

While luxury spirits represent a relatively small segment of the market, distilleries are bringing in major money from luxury products that are becoming increasingly popular. Consumers are becoming more conscientious about where and how they spend their money and that is being reflected in what they drink. Fortunately, even if you don’t have a cool million to spend on a bottle of tequila or vodka, you can still support craft distillers and enjoy high-quality, “luxury” products.  

FAQs

What are the 7 types of spirits? 

Gin, whiskey, vodka, rum, vermouth, cognac, tequila, and mezcal.

What are luxury spirits? 

Luxury spirits are made with the finest quality ingredients and have clear standards when it comes to the aging process. These brands are also working to educate consumers about their spirits and relying on the quality of their product, not gimmicky marketing tactics to grow their business.

Are luxury spirits sales on the rise? 

Yes, the volume of luxury spirits sold has increased by 125% between 2015 and 2020. 

What is the most expensive liquor? 

The most expensive spirit is appropriately named Billionaire Vodka and costs $3.7 million. 

Share:

Facebook
Twitter
Pinterest
LinkedIn

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Posts:
Subscribe to

Newsletter

Stay up to date with the latest in marketing, sales, service tips and news for the beverage alcohol industry.

Related Posts