American Whiskey Exports Reportedly Starting To Rebound

by TK Sanders
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(Photo by Bryan Woolston/Getty Images)

American whiskey exports are on track for a full recovery from COVID-era regulations and tariffs. Exporters of bourbon, whiskey, and rye whiskey in particular saw a 15 percent increase in revenues over the industry’s 2020 totals. The Distilled Spirits Council of the United States said that the exporters netted around $975 million last year — not far from the industry record of $1.2 billion from 2018.

A trans-Atlantic trade fight caused severe drops in exports to the European Union, the industry’s largest overseas market, two years ago. When Donald Trump imposed tariffs on European-made aluminum and steel in 2018, the EU retaliated with tariffs on whiskey; among other retail products. The Europeans ceased the tariffs in 2021, which helped lift revenues for domestic suppliers.

“U.S. spirits exports are beginning to bounce back and that’s definitely a positive sign. But the value of 2021 exports remains far below levels achieved before the 2018 retaliatory tariffs kicked in,” Rob Maron, the Distilled Spirits Council’s vice president of international trade, said Thursday.

One key European market, the United Kingdom, never lifted the tariff, however. That decision continues to curtail growth in the overseas sector, according to experts.

Domestically and abroad, the reopening of entertainment and hospitality venues meant big numbers for the American whiskey exports industry. Reports also suggest that consumers chose more premium and super-premium American spirits, which cost more than regular brands.

American whiskey exports enjoy one primary advantage over other spirits: price point

Amir Peay, owner of the Lexington, Kentucky-based James E. Pepper Distillery, said full market recovery in Europe won’t happen overnight. Just as the product, itself, takes time to craft properly, so, too, does building a market presence for any alcohol brand. After all, consumers may have preferences when it comes to alcohol; but at the end of the day, they will pick something they can access and afford. And American dark liquor is simply not on the tip of their tongues in Europe at the moment.

“The wind is in a much better direction,” Peay said. “But it’s just unrealistic to think that we can flick a light switch and just immediately go back to a realistic pace of rebuilding what we lost. It’s just impossible from the situation we’re in right now.”

Another challenge is deciding how much inventory to allocate to meet global demand. Combined U.S. sales for whiskeys rose 6.7 percent, or $288 million, to $4.6 billion in 2021. To meet that rising demand, product earmarked for overseas sales has to stay domestic, instead. It’s a constant game of plate-spinning and forecasting; one with millions of dollars on the line.

Because of dark liquor’s increased price point, last year American whiskey accounted for 61 percent of all U.S. spirits exports (in dollars) and 38 percent (in volume). Considering the international popularity of whiskeys and bourbons, expect revenues to continue to rise in the coming years.

Outsider.com