2024-10-17
Wine and liquor sales in the United States have experienced a significant decline over the past year, according to a recent report from SipSource. Despite optimism in some sectors, the data shows that the outlook for the alcohol industry is not promising. The report reveals that wine sales from wholesalers to retailers, restaurants, and bars dropped by 8% in the 12 months leading up to August 2024, while liquor sales fell by 3.9%. These declines are concerning, especially for liquor, which had shown sustained growth in recent years. Dale Stratton, a SipSource analyst, described the drop in wine sales as "significant," noting that this trend has persisted for several months.
One segment that had shown strength in previous months, high-end liquors, also suffered a sharp decline. Retail sales of bottles priced over $100 dropped by 8.5%, and the decline was even steeper in bars and restaurants, where sales fell by 12.5%. In contrast, premium spirits continued to see notable growth, according to data from IWSR. High-end wines have remained relatively stable, with sales of wines over $50 increasing slightly, though by less than 1%.
The low-cost wine segment continues to see significant declines. Prosecco is one of the few exceptions, with a 2% increase in sales over the past 12 months. Sales of wines priced between $8 and $11 dropped by 12.7%, impacting popular brands like 19 Crimes and Apothic, known for their reds, which are now struggling in the market. This is particularly concerning as these figures represent volume sales. Meanwhile, Consumer Price Index data from the Federal Reserve shows a continued rise in Americans' spending on alcoholic beverages, especially in urban areas, although this reflects rising prices rather than increased per capita consumption.
Stratton noted that while the situation is troubling, wine sales could stabilize by the end of the year, coinciding with the holiday season, traditionally the peak period for alcohol sales. Despite this potential uptick, Stratton warned that a return to growth should not be expected in the short term. The report also highlights that the market for expensive liquors, particularly tequila priced over $100, has been among the hardest hit. During the pandemic, sales of these products surged as many consumers, unable to travel, invested in premium beverages. However, these buyers now appear to be cutting back, opting for more affordable products.
In terms of wine, positive news is scarce. While Prosecco has performed well, other categories are struggling to maintain sales. Rosé wines, which once enjoyed significant popularity, have begun to decline, and retailers are advised to be cautious about increasing their stocks of this type of wine. Meanwhile, young white wines have suffered the least, although their sales are not improving, but rather not falling as sharply as other categories.
SipSource is one of the most comprehensive data sources in the U.S. wine industry, with its statistics drawn from the Wine & Spirits Wholesalers of America, whose members distribute the majority of bottles sold in retail stores, bars, and restaurants nationwide. However, these figures do not include direct-to-consumer sales, which have also declined. A report from Sovos ShipCompliant/Wine Business Analytics showed that direct-to-consumer wine sales fell 11% in the first six months of 2024 compared to the same period the previous year.
Stratton remains optimistic about the future of the market, suggesting that uncertainty surrounding the upcoming presidential election may be causing consumers to be more cautious with their spending. Once the results are clear, the market could recover as people may feel more secure in spending, including on alcohol. The holiday season remains a key period for wine and liquor sales, which could provide temporary relief for the industry. All eyes are on the coming months to see whether the sector can recover or at least stabilize.
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