Yahoo Finance Spirits Sales Have Fallen This Year as the Industry Faces a New Normal
Earlier this week, beverage industry website the Spirits Business cited a new report showing that spirits sales in the U.S. were down by nearly 3 percent in the year leading up to March of 2024. That’s clearly bad news for the industry and the distilleries who actually make the spirits, and while the future remains uncertain, this is not the only pessimistic reporting as of late.
The report cited comes from SipSource, a data crunching tool run by the Wine & Spirits Wholesalers of America to cover sales figures from wholesalers and liquor retailers around the country. The numbers show that spirits sales were down 2.7 percent from April 2023 to March 2024, while wine sales were down 8.3 percent. And there seemed to be a dip at the very end of that period, with spirits sales down 5.2 percent from January to March, and wine down 10.9 percent over the same period. “Wine and spirits categories are currently underperforming expectations and have started the year in a slump,” said SipSource analyst Dale Stratton in the report. “Most categories and channels will likely break out of their slumps and significantly improve their performance, while others will continue to struggle the entire year.” He went on to cite a number of factors that could be contributing to this decline, including inflation and gas prices.
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This is not the only warning sign for the spirits industry, as some of the biggest drinks corporations have issued reports that show their own declines. Last month, Constellation Brands reported a decline of 6 percent across its wine and spirits portfolio, which includes well-known brands like High West, Casa Noble Tequila, and Svedka Vodka. The company’s overall earnings were up, however, thanks to an 11 percent increase in sales of its beer brands, which include Mexican beer giants Modelo and Corona.
Pernod Ricard, the company behind Jameson, Redbreast, Martell Cognac, and Absolut Vodka, said that sales fell by 11 percent in the U.S. over its third quarter. According to a recent Reuters story, Pernod pointed at retailers cutting high-end spirits from their inventories, which sold well at the height of the Covid pandemic but have declined as things began to normalize. The Chinese market, traditionally important to high-end spirits, showed significant decline as well for Pernod, while sales rose by 8 percent in India. In January, shares of Diageo decreased in value after reports that major brands like Casamigos Tequila slipped by 14 percent in America.
Campari Group, which owns Espolon Tequila, Wild Turkey, and Glen Grant, recently reported essentially a flat sales landscape, with a .4 percent decline in the U.S. market. This was certainly due in part to Wild Turkey sales dropping by more than 10 percent due to “shipment declines” here and in Australia—traditionally a big market for this bourbon—while Espolon and the Campari brand itself showed growth. Speaking of bourbon, earlier this week Kentucky news station WDRB reported that Heaven Hill was offering buyouts to 14 workers at its bottling plant due to what it called a softening market, something that the UFCW Local 23D union was not happy about. But Heaven Hill, which is privately owned, told WDRB in an email that the company is “outperforming its competitors as a whole,” and plans remain on track to open a new $135 million distillery in Bardstown, KY that will double its production.
As to be expected, there is some conflicting information here as companies try to put their best spin on poor showings. But all of this doesn’t mean the spirits industry is about to collapse anytime soon–if anything, it could just indicate stabilization for a spirits market that has had consumers paying some extreme prices over recent years. According to SipSource, spirits sales over the rest of 2024 are likely to improve, although they might not reach the heights of a few years ago. In other words, the new normal could be more, well, normal, which ultimately would be a net positive for people looking for an affordable bottle of whiskey.
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