Beverage Business Briefing

**Key Themes This Week:**

- Structural US alcohol market contraction deepens across spirits, beer, and wine

- RTD/Prepared Cocktails surge 30%+ as the only consistent growth category

- Southern Glazer's federal bribery indictment sends shockwaves through distribution

- Diageo abandons premiumization playbook; cuts hospitality team and dividend

- Tequila growth story stalls: Casamigos -24%, Jose Cuervo -15%

- Wine industry in worst structural correction in decades

**Major Corporate Moves:**

- AB InBev closes BeatBox acquisition for up to $490M

...

**Key Themes This Week:**

- US bev-alc market showing tentative recovery; January 2026 comps turned positive for first time in over a year

- RTD cocktails dominate growth: spirits-based RTDs +39.4%, wine-based RTDs +23.7%

- Premium spirits correction deepening: Diageo US sales -6.8%, MGP brown goods -52%

- Generational consumption shift accelerating; binge drinking among 21-34 year olds down ~3.9 million people over decade

- Regulatory uncertainty compounding across THC, tariffs, distribution, and state-level wine sales

**Notable Stories:**

- **Diageo** — New CEO Dave Lewis plans sweeping leadership overhaul; halves di...

**Key Themes This Week:**

- Broad-based U.S. volume declines across beer (-5.9% full-year shipments), spirits (-7% value), and wine (DTC -14% volume in OR/WA)

- Distribution tier structural contraction: Breakthru cuts ~500 jobs; RNDC shed 1,700+ in past year; Reyes in active talks for further consolidation

- RTD cocktails as the dominant growth engine: +7.1% dollar sales (NIQ), +35.2% value growth and +382 bps share gain (Jefferies)

- K-shaped consumer spending visible across every category and channel

**Major Earnings & Financial Results:**

- **Pernod Ricard:** H1 revenue €5.26B (-14.9% reported, -5.9% or...

## SHOW NOTES

**Key Leadership & Corporate News**

- Constellation Brands CEO transition: Nicholas Fink succeeds Bill Newlands effective April 13, 2026

- Heineken announces 5,000-6,000 job cuts (7% of workforce) over two years; targets €400-500M annual savings

- AB InBev FY25 EBITDA at $21.2B; guides FY26 organic growth of 4-8%

- Coca-Cola consolidates Red Tree Beverages and BodyArmor under North American Operating Unit

**M&A Activity**

- E.&J. Gallo acquiring Four Roses Bourbon from Kirin for $775M

- Crimson Wine Group acquires Ra...

### Key Themes This Week:

- **RTD Revolution**: Ready-to-drink cocktails drove +17.1% volume growth; spirits excluding RTDs were -2.7% volume

- **Historic Milestone**: Spirits overtook beer in U.S. revenue share (42.4% vs 41.8-41.9%)

- **Consumer Caution**: Affordability-first behavior intensifying; Hispanic consumer concern affecting on-premise traffic

- **Wine's Structural Reset**: Participation down to 29% of adults; 512 fewer wineries YoY

- **Distribution Disruption**: RNDC California exit causing ripple effects; consolidation accelerating

### Major Company Moves:

- **Kirin** selling Four Roses bourbon to E&J Gallo for up to $775 million

...

## SHOW NOTES

### Key Themes This Week:

- **U.S. demand showing modest improvement** but still negative; off-premise total alcohol -1.2% (improved from -3.4%)

- **RTD/Prepared Cocktails remain the clear winner** at +7.4% dollar growth

- **Wine DTC in structural decline**: -15% volume, -$230M value, average bottle price up 11% to $56.78

- **Distribution disruption accelerating**: RNDC losing major suppliers; Delicato, Johnson Brothers, Breakthru expanding

- **Inventory overhang persists**: wholesaler levels ~45% above 2019 average

### Notable Deals & Moves:

- **AB InBev acquires 85% of BeatBox...

- **Theme of the week:** Stabilizing demand signals, but rising execution risk—driven by value-conscious consumers and major distribution disruption.

- **Wholesaler signal:** NBWA’s January Beer Purchasers’ Index rebounded sharply vs. December, with **below-premium** reaching an expansion threshold—though overall conditions remain cautious.

- **Beer pricing reality:** Industry leaders say the era of dependable annual price hikes is fading; focus shifts to **pack/price architecture** and tighter value ladders.

- **Moderation & substitution:** Dry January and longer-run data point to sustained moderation; **NA beer and RTDs** remain key beneficiaries.

- **RTD momentum...

- **Theme of the week:** A “K-shaped” U.S. alcohol market—headline declines, but strong growth pockets in NA beer, RTDs, and select super-premium brands

- **Beer 2025 wrap:** Total beer finished down in dollars and volume; **domestic premium weakened** while **domestic super premium and NA beer grew sharply**

- **Channel signal:** Convenience stores are holding up better for beer, with **NA beer surging** and seltzer stabilizing relative to broader retail

- **On-premise vs off-premise:** Alcohol pricing **away from home is rising faster** than at-home inflation, reinforcing the battle for occasions and mix

...

Holiday sales delivered a short-term lift, but total U.S. alcohol demand remains down ~5–6% YoY across beer, wine, and spirits

RTDs and prepared cocktails remain the clear growth engine, growing dollars despite softer volumes

Beer declines continue, but super-premium, import, and non-alcoholic segments are gaining share

Spirits face mounting pressure outside of RTDs, with visible financial stress among smaller operators

Wholesaler inventories remain elevated, driving tighter SKU discipline and cautious buying into 2026

Supplier distribution strategies are shifting toward regional and mid-tier partners for better execution

Health-and-wellness narratives, mo...

Bourbon enters a normalization phase as Jim Beam pauses distilling in 2026 amid record barrel inventories

Major suppliers shift to margin protection and inventory management over capacity expansion

Constellation Brands expected to hold earnings despite beer depletions near -4%

U.S. consumers still spend big on alcohol, but value and occasion-based trade-offs are accelerating

RTDs dominate growth both on- and off-premise; NA beer emerges as a quiet winner

Wine DTC volumes slide hard, but ultra-premium Cabernet remains resilient

New York supermarket wine proposals and cannabis competition raise route-to-market...

Demand remains soft, especially in spirits; beer is pressured but more resilient, and shipment/depletion optics may still overstate true consumption.

Promotion strategies are diverging: spirits promo depth rising; beer promos more measured; non-alcohol promo behavior varies by segment.

American whiskey is retrenching output amid elevated inventories—raising the stakes on inventory agility and long-term capacity planning.

Wine is the week’s clearest stress point with debt-impaired outcomes and major impairments signaling a reset—while premium and sparkling show relative resilience.

RTDs stay hot with standout brand growth, drawing continued capital and le...

Big deal / “Beyond Beer”

AB InBev moves to buy 85% of BeatBox (up to $490M, close expected Q1 2026), reinforcing RTD/FAB consolidation.

Beer remains soft, but share battles intensify

Beer shipments down YoY; analysts see stabilization in pockets but continued declines overall.Category winners focus on execution, price/mix, and channel strength.

Spirits: trade-down + RTD boom

Premium pressure shows up in tier data; meanwhile prepared cocktails/RTDs surge with standout brand growth.

Wine: supply correction + major WA ownership change

Wyckoff Farms buys Ste. Michelle Wine Estates; broader U.S. wine stil...

Macro backdrop: Record holiday shopper traffic and higher spending per person collide with weak confidence and soft core retail sales—consumers are still going out, but they’re laser-focused on value and promotion.

Beer check-in: October shipments down ~3–4% YoY, but scanner data show a holiday rebound; non-alcoholic beer and super-premium brands like Michelob Ultra, Pacifico, Guinness, and White Claw lead growth while core segments remain soft.

Spirits snapshot: Slight volume declines overall, with Tequila and RTDs still growing; whiskey is bifurcating—premium and export strong, value segments weak—against a backdrop of tariffs, craft bankruptcies, and ongoin...

Major Themes

Elevated inventories (inventory/sales ratio 1.67) continue to pressure pricing, innovation, and depletions.Consumer caution deepens: weaker sentiment, reduced alcohol participation, rising non-alcoholic preferences.Category divergence persists—RTDs and premium agave outperform; wine and beer face continued softness.

Key Stories

RTDs +3.7% weekly dollars; strong growth in wine-based seltzers and single-serve cocktails.Beer weakness continues off-premise; on-premise shows better seasonal momentum and trial-driven opportunities.Wine softness intensifies—shrinking consumer base, Napa acreage abandonment, and slower depletions.Walmart, Kroger, and private label trends reshape retail economics and pack/price strategy.Regulatory tension: TTB backlog, Colorado grocery wine...

Regulation & Policy

Federal clampdown on intoxicating hemp cannabinoids sets up a major 2026 reset; FDA guidance due within 90 days.California launches a 2026 craft distillery DTC pilot, offering a key release valve for oversupply.Airports, airlines, and municipalities tighten alcohol service norms; litigation highlights labeling and pricing scrutiny.

Market Performance

U.S. spirits decelerate; Diageo expects ~–6% U.S. decline.Beer outlook worsens globally; craft continues to contract.Wine accelerates toward long-needed supply correction after a two-decade-low crush.Weekly U.S. scans: total bev alc down 4.5% YoY; non-alc beer +18%.

Consumer Behavior

Caution dominates: essentials up, di...

Show notes

• Hemp THC crackdown

• Congress passes language that effectively removes most high THC hemp drinks from legal commerce within about a year, with strict total THC caps per container.

• State attorneys general, alcohol trade groups and ongoing litigation increase compliance and portfolio risk for distributors and retailers carrying hemp beverages.

• Demand and consumer backdrop

• Consumer sentiment falls back toward twenty twenty two lows and more than a third of shoppers plan no alcohol purchase for Thanksgiving, with another quarter cutting back.

• GLP 1 adoption reinforces moderation trends as users cit...

Market pulse

Beer BPI at 24, 11 months of contraction. Q3 on-premise: draft –1.8%, packaged –5.1%.Off-premise week ending Oct 26: TBA –5.5% YoY; beer –7.2%, wine –4.5%, spirits flat. Premixed cocktails +34%.September domestic beer shipments +1% YoY, but YTD –5.1%.

Share movers and bright spots

Draft leaders: Michelob Ultra, Miller Lite, Coors Light, Modelo Especial, Bud Light.Gainers: Pacifico, Blue Moon, Busch Light; in retail, Pacifico, Guinness, Athletic NA, Angry Orchard, Goose Island.RTD velocity leaders: High Noon, Surfside, Sun Cruiser, Nütrl; scan data understates independents.

Spirits and whiskey

MGP Q3 down on elevated barrel inventories; industry whiskey production cut sharply.SipSo...

At-home shift widens: Alcohol-at-home +0.3% vs away-from-home +4.1% YoY; on-premise traffic and velocity remain pressured.

Beer reset: Category volumes down; fall price hikes muted. AB InBev gains share via Ultra/Busch Light; others softer.

Spirits bifurcation: Prepared cocktails and agave hold up; core spirits ex-RTD contract; promo depth rises to chase value shoppers.

Wine still correcting: Retail and DTC negative; bright spots in Sauvignon Blanc, rosé, sparkling; Champagne improving sequentially.

RTD scoreboard: Cutwater surges; spiked tea pops (Surfside, Sun Cruiser); hard seltzer continues to decline.

Company moves: Boston Beer tightens margins a...

The US beverage alcohol industry faces its most dramatic transformation in decades. Consumer participation hit record lows, major suppliers are slashing forecasts and workforces, yet clear winners emerge: non-alcoholic beverages up 22%, RTDs becoming the growth engine, and hemp-derived THC drinks creating new competition. We break down October 2025 market data to understand what's really happening.

THE CRISIS

Only 54% of US adults drink alcohol (record low)Beer volumes down -4.5% YTD; wine sales back to 2011 levelsDiageo cut forecast to +0.9%; Pernod Ricard to -10.4%Brown-Forman cut 650 jobs; Molson Coors cutting 400 rolesKentucky bourbon barrels at all-time high: 16.1 million (oversupply crisis...

Market pulse: Bevalc dollars down, beer & wine weakest; spirits growth concentrated in RTDs; NA beer resilient; ABI steady share; Modelo cools.

Moderation & value: Only ~54% of adults drink; shoppers gravitate to sub-$20 and trimmed craft lineups.

RTDs surge: RTD share +420 bps YoY; Cutwater standout; core spirits soften on price/mix.

THC beverages: Target MN pilot launches; Ohio pauses intoxicating hemp; CA channels intoxicating hemp to cannabis by 2028.

Route-to-market: NBWA emphasizes distributor independence; SGWS–Provi settlement legitimizes digital ordering.

Capacity pinch: Manna/NorCal plant auctions tighten co-packing; plan longer lead times.

...

US Market Intelligence | Oct 6–10, 2025

Beer demand stays soft (BPI 28) while value tiers and FMBs hold up. Whiskey faces mounting stress—Uncle Nearest enters receivership—though potential Scotch tariff relief could lift holidays. Prosecco leads sparkling growth. The TTB shutdown freezes approvals, and hemp rules tighten across key states. Cargo thefts rise, copacker closures hit production, and Gen X drives CPG spend.

Focus: protect margins, push RTDs and accessible sparkling, and prep for regulatory delays.

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