Beverage Business Briefing

- **Market pulse:** Total alcohol dollars down 2.4 percent to 8.1B and volume down 4.5 percent to 156.9M cases (NIQ, four weeks ending Oct 10). Prepared cocktails were the only segment up in dollars (plus 1.7 percent). Beer was down 3.4 percent, wine down 3.2 percent, spirits down 2.1 percent.

- **Spirits:** Pernod Q1 organic sales down 0.9 percent to ?2.23B (US down 10 percent, China down 25 percent, India up 19 percent). Destocking continues through FY27. Diageo cut about 2,000 roles. Citi modeled Diageo Q1 FY27 at negative 0.1 percent (North America negative 5.8 percent). IWSR found $100-plus spirits down 6 percent in the US. India is both an opportunity (UK...

- **Spirits near a floor:** Pernod Ricard Q1 FY27 sales were ?2.234B, with US down 10% on destocking. Jameson, Kahlúa, Skrewball and Malibu were bright spots. India grew 19% on pipeline fill ahead of a possible IPO.

- **Brown-Forman:** US is about 42% of sales. Gross margin of 60.2% is likely the year's peak, with pressure through FY27 and a roughly two-year whiskey inventory clearance. No new restructuring planned.

- **Spirit tracker data:** Jefferies shows value at -1.7% (+3.0% with RTDs). RTDs grew 23.3%, and Surfside passed Cutwater as top contributor. Citi shows prepared cocktails +23.4% against core spirits -1.2% in s...

**Distribution reshuffle:** RNDC's Chapter 11 and asset sales are moving territory to beer-led wholesalers (Reyes, Quality Brands, Columbia, Morales, Manhattan Beer). Reyes' 11-market, $5B+ deal makes RBG Spirits and Wine the No. 3 wine and spirits house.

- **Southern Glazer's:** dropping "Wine & Spirits" from its name in early 2027, buying beer assets (AB's NYC operation, Clare Rose, Eagle Rock), and facing a $12.5M DOJ non-prosecution agreement, an FTC Robinson-Patman consent decree, and a California price-discrimination probe.

- **Other deals:** Martignetti acquiring Girardi; Breakthru exiting the RNDC Kentucky and Indiana deal; Keg 1 River City and Morales stepping in; Sierra...

Distribution redraw (Martignetti-RNDC control states, RNDC bankruptcy breakup, Colorado franchise lawsuit vs. Constellation/Mark Anthony/Reyes); Diageo cost cuts and production pauses alongside Guinness strength; California wine supply-credit crisis (vineyard removals, custom-crush collapse, Napa lawsuits/foreclosures); post-Labor Day volume softness (beer/wine down, RTDs decelerating except pockets); status-spirits reset except agave; hemp-THC boom vs. possible December federal ban; ABI execution and share gains; experience-led on-premise and retail (wine bars, Costco, TGI Fridays).

- **Notable stories**: Coors Distributing vs. Crown/Constellation/Mark Anthony over Colorado franchise law; Legend Napa Valley custom-crush shutdown and harvest shocks; BuzzBallz trademark win...

- **Key themes:** Two-speed US beverage alcohol market—volume contraction and credit stress in wine and mainstream beer versus price/premium/RTD/NA/digital resilience at scale players; California wine oversupply, vine pulling and bankruptcies; policy fights over dietary guidelines, New York grocery access, hemp/kratom, Canadian whisky tariffs; distribution consolidation and cargo-theft enforcement.

- **Notable stories:** Gundlach Bundschu Chapter 11 and Signorello foreclosure (American AgCredit, Tiverton, Azur Associates, Silicon Valley Bank/Rob McMillan); ABI Capital Markets Day (BEES, Balanced Choices, Beyond Beer/Cutwater/NUTRL, 5-9% EBIT, Michelob Ultra); Diageo US reset and CFO change (Joanne Wi...

**Anniversary**

- Episode 52. One year of the DrinxAI Weekly. Thanks to the distributor and supplier partners who provided feedback all year.

- Year one defining threads: drinking participation at a record low fifty four percent; the RNDC collapse and wholesale reconsolidation under Reyes, Martignetti, and Southern Glazer's; the whiskey unwind from Stoli to Uncle Nearest; Gallo and Four Roses at seven hundred seventy five million dollars and Sazerac's rejected fifteen billion dollar run at Brown Forman; wine's physical contraction to roughly five hundred forty thousand California acres; RTDs, non alcoholic, and energy drinks carrying all...

- Compliance: Southern Glazer’s $12.5 million NPA over retailer bribery; TTB no further action; Almave NA listing continues.

- Inventories & destock: Evercore ISI July data, 1.66 inventory-to-sales ratio, pantry levels rising.

- Off-premise NIQ (4 weeks to Aug 29): total alcohol –4.3% dollars / –6.1% volume; beer weakest; RTDs, NA, imports, super-premium holding; detailed brand and manufacturer gainers (Pacifico, Victoria, Surfside, Super Lyte, Josh, LaMarca, Deutsch, etc.).

- Depletions: WSWA SipSource wine/spirits –6.8% LTM; spirits weaker than wine; on-premise less damaged.

- Earnings & leadership: Molson Coors S&P 500 exit despite beat; Pernod U.S. –14%, recovery 2029; Fever-Tree guidance; Boston Bee...

- **Key Themes**: Prolonged U.S. volume contraction in beer (16th month of tax-paid declines, BPI at 40, craft conglomerates under 25% growth), wine (light 2026 crush, tasting-room misalignment), and spirits (destocking, tequila weakness, Canadian whisky tariffs); RTDs, NA, and price/mix as sole offsets; wholesale fragmentation via RNDC Chapter 11.

- **Notable Stories**: Saothair restores NAB/FIFCO USA independence with Labatt, Genesee, and RTDs; Brown-Forman Q1 GM 60.2%, RTD momentum, tequila drag, rejected Sazerac/Pernod; Pernod FY sales -3.9% organic, U.S. -14%, soft through 2029, Italicus close; RNDC Georgia WARN 558 jobs, lease rejections, Indiana LOI to MBG; Martignetti buys Girardi; NDC...

**Key Themes:** Record-low US drinking participation (Gallup 54%) colliding with cannabis surge (17% smoking, 15% edibles, use disorder doubling among 40-50s); no summer sales rebound (NIQ Total Alcohol -3.4% dollars/-5.3% volume; beer heaviest drag); dollars holding via price/mix, NA beer, sparkling, select RTDs and Mexican/super-premium SKUs while core beer, still wine and most craft stay volume-soft; on-premise betting on beverages as traffic drivers, NA options, spritzes, sports occasions and Champagne; distribution consolidation and access risk post-RNDC/Reyes; family-control drama and private-balance-sheet buying in whiskey.

- **Notable Stories:** Gallup details plus Beer Institute LDA pushback...

- **Record-low participation and volume declines**: Gallup 54% adult drinking (Lydia Saad); NIQ off-premise $8.5bn -3.6%, volume -5.4% (Aug 8 four weeks); beer volumes -4.4% to -6.3%; wine dollars up, cases down ~7%.

- **World Cup miss**: ABI $110m Michelob Ultra spend, Doukeris 0.25% lift; Circana/BeerBoard/BMI data show no category rescue; spirits RTDs (Cutwater, Surfside, Sun Cruiser) captured occasions.

- **Diageo reset**: Uncompetitive North America; $19.6bn sales -2-3% organic, profit -27%; $1.2bn restructuring, ~2,000 headcount cut, possible 3-5k more jobs; dividend halved; RTD tilt, Smirnoff/Captain Morgan reinvestment; India flavouring reformulation (Antiquity Blue, Royal Challenge, McDowell’s...

Key themes

- Clinical moderation: AUD down about 4 million people; mild cases drove the drop; Surgeon General cancer advisory, youth cohort habits, cannabis substitution, and GLP-1s in the mix

- Two-speed market: depletions and inventories stabilizing, not recovering; off-premise still the bottleneck; on-premise and World Cup occasions outperforming

- RNDC breakup rewriting access and credit: K1RC Kentucky LOI after Breakthru walked; Reyes 11-state deal already done; Proximo $93.92 million unsecured; WVVI and TWE credit and stock damage

- Wine supply destruction: TWE nearly $1.25 billion US impairments including Daou, Frank Family...

- **Diageo reset:** ~$1B cost cuts ($850M operating model + $150M supply chain); organic sales –2% to $19.6B; NA –8.4%; US spirits –11.5%; dividend halved; guidance to low-single-digit sales / mid-single-digit OP growth; Smirnoff, Captain Morgan, Crown Royal value-pack push; Don Julio/Casamigos smaller formats; RTDs across cores; Guinness ~$1B to 2030; shares +5.6%.

- **RNDC Chapter 11:** >$3B brand revenue lost; >$400M unsecured claims (~$94M Proximo largest); liabilities $1–10B vs assets $500M–$1B; 5,444+ WARN layoffs; Reyes 11-market deal (~38M cases, 16 states); Southern Glazer’s Eagle Rock Colorado close (full A-B portfolio + Cutwater/NÜTRL/BeatBox); Martignetti Michigan brokerage + Breakthru IN/KY JVs; Heimark acquiring Alford (Imper...

### Key themes

- **RNDC Chapter 11** reshapes national wholesale; two-route-to-market split accelerates

- **Two-speed industry:** price/premium/RTD/NA strength vs. volume, craft, and mid-tier pressure

- **Wine supply destruction** in California alongside K-shaped demand

- **M&A and succession:** Sazerac/Brown-Forman, Cobblestone/Campari assets, Whiting retirement

- **Policy pile-up:** hemp three-tier, DtC enforcement, state pricing, Scotch tariff relief, EPR, labeling

### Major corporate & earnings

- **RNDC:** Ch. 11 (S.D. Tex., July 26); $1–10B liabilities; 100k+ creditors; top-30 unsecured >$300M; Proximo $93.92M largest; DIP $75M; NDC an...

**Week framed by:** Soft post-holiday off-premise demand, Brown-Forman CEO succession, Diageo cost/strategy reset, Canada/Mexico trade escalation, A-B decree expiry, RTD & NA outperformance

### Major corporate & leadership

- **Brown-Forman:** CEO Lawson Whiting to retire on successor appointment; board search (chair Tracy Skeans); FY26 sales $3.9B (-1%), EPS $1.53 (-17%); FY27 flat organic sales, -3–5% organic OI; stock $26.25; Pernod talks ended Apr 28; Sazerac ~$15B /$32/sh bid rejected May; internal names Michael Masick, Marshall Farrer; Wolf Pen Branch supportive

- **Diageo:** CEO Dave Lewis cutting headcount 20–30% (some units to ~40%); Accelerate $625M by 2028 / ~$300M this year...

**Key Themes**

- Persistent off-premise softness (–2.7 to –3.1% dollars YTD/4-week ranges; volumes –3.9 to –4.9%) despite Independence Day and World Cup lifts.

- Prepared cocktails/spirits-based RTDs and NA beer as primary growth engines; wine and craft under structural pressure.

- Distribution shock from RNDC wind-down cascading into widespread payment delays; Reyes total-beverage rise and regional consolidations.

- Escalating Canada trade friction via Tenney’s CANADA Act and Section 301 push.

- Sharp wine-industry right-sizing: Top-50 production –19% since 2019, acute Napa vineyard economics, Oregon “worst crisis in 20 years,” early light California harvest.

- Leadership a...

**Category-Wide Trends**

- Spirits overtook beer in U.S. alcohol revenue share for 2025 (42.4% vs. 41.8%) per DISCUS, even as beer still leads on volume

- Wine fell below 300 million 9-liter cases for the first time in two decades

- Off-premise total beverage alcohol dollars down ~3.1% for the four weeks ending June 27; wine hit hardest, club stores the only channel gaining

- RTD/prepared cocktails remain the industry's standout growth pocket — spirits-based RTDs up 26-30% depending on source

- Spirits volumes have declined four consecutive years (IWSR); Gallup pegs alcohol drinkers at...

## Market Overview

- NIQ off-premise: total bev-alc dollars -3.6% YoY to $8.8B; volume -5.1% to 173.8M cases (4 wks ending 6/20)

- Weekly bump +2.9% on World Cup, Juneteenth, early Father's Day

- Wine -5.1%/-6.8%; Spirits -5.2%/-4.7%; Beer -3.7%/-4.5%

- RTD cocktails the standout: spirits-based RTDs +28%/+28.5%; wine-based RTDs +7.3%

- Top RTD growth brands: Cutwater (A-B, +124.5%), Surfside (Stateside, +57.5%), Sun Cruiser (Boston Beer, +101.8%)

## Beer

- World Cup on-premise lift: national +5.5%, host markets +15.4%, Massachusetts +27.5%, NY/NJ +9.1% total/+18.5% on-premise, stadium concessions +21.7%

- BeerBoard: host states +14.21% kegs/line, +12.07...

- **Big market question:** TD Cowen challenged the structural-decline narrative, forecasting U.S. supplier gross revenue growth of 1.3% CAGR from 2025 to 2030, with volume stabilization in 2027.

- **Current category pressure remains real:** IWSR reported total U.S. beverage alcohol volume down 5% last year; NielsenIQ showed recent total alcohol dollar sales down 4.1%.

- **Beer was mixed:** Constellation Brands gained momentum behind Modelo and Corona, ABI improved with Michelob Ultra, Bud Light, and Budweiser, while Molson Coors remained pressured by Miller Lite and Coors Light softness plus aluminum cost headwinds.

- **Diageo restructuring intensified:** CEO Dave...

* **Global Trade & Tariff Volatility:** A 100% U.S. tariff threat on French wine/Champagne looms over France's 3% Digital Services Tax. Concurrently, the American Whiskey Association is actively lobbying for access to India’s massive emerging consumer class. The interdependency of the global spirits trade was highlighted by John Swinney’s visit to Independent Stave Company's Kentucky Cooperage.

* **Corporate Resets & Sweeping Restructuring:** Under the cost-cutting leadership of Sir Dave Lewis, Diageo begins deep cuts, executive shakeups (departures in North America, UK, Africa; hiring Marc Woodward), price cuts on flagship brands, and an aggressive pivot to canned RTDs.

* **The...

**Key Themes This Week:**

- US beverage alcohol market in structural multi-year decline; IWSR projects -18% servings by 2035

- Beer enters summer with negative momentum; Memorial Day disappointing across channels

- World Cup represents industry's largest activation bet — Diageo makes history as first spirits sponsor

- Wine industry contraction deepens: Treasury Wine Estates slashes portfolio from 76 to

**Distribution Upheaval**

- RNDC closes transfer of 11 markets to Reyes Beverage Group; Reyes now covers 52% of US LDA population

- Additional RNDC market exits pending: Columbia Distributing (OR/WA), Martignetti (17 control states), Manhattan Beer (NY), Breakthru (KY/IN), Quality Brands (NE/SD/ND)

- RNDC layoffs reach up to 4,677 positions across multiple states; NC, SC, OH facilities closing

- Southern Glazer's acquires Clare Rose on Long Island; rebrands to Southern Glazer's Beverage Company in July

- T.J. Sheehan acquires Eagle Beverage in Central New York (+3M cases)

**Key Themes This Week:**

- US beverage alcohol market broadly declining across all categories; consumer sentiment near historic lows

- Spirit-based RTDs are the sole clear growth engine within spirits

- Non-alcoholic beer continues rapid ascent, led by Athletic Brewing and Go Brewing

- Wine faces a six-year structural contraction; DTC shipments resume decline after brief March recovery

- Craft beer regional breweries see 55%+ in decline; consolidation accelerating

**Major Company & Brand Moves:**

- **Uncle Nearest:** Receivership expanded; federal investigation disclosed; court values brand...

**Key Themes:**

- Broad US bev-alc contraction deepens: total off-premise sales down 6% in dollars, 7% in volume (4 weeks ending May 9)

- Consumer trade-down behavior hits record levels; premium and luxury tiers under acute pressure

- Spirits-based RTDs remain sole reliable growth engine but approaching saturation with 750+ brands

- RNDC national unwind accelerates with Oregon WARN filings; distribution map being redrawn nationwide

- Bourbon oversupply crisis: 16.1 million barrels in Kentucky, Jim Beam still shuttered through 2027

**Notable Company Moves:**

- Brown-Forman cut 12% of workforce; Citi cuts...

**Key Themes This Week:**

- **The Great Distribution Reshuffling:** RNDC exits nearly all U.S. territories; Reyes acquires 11 states, Breakthru takes Kentucky and Indiana, Martignetti absorbs 17 control states, Manhattan Beer takes New York wine/spirits rights, Columbia Distributing eyes Oregon/Washington/Alaska, Quality Brands picks up Nebraska and the Dakotas. Southern Glazer's and Johnson Brothers aggressively capture displaced relationships. Glazer's Inc. confirms family leadership continuity after Bennett Glazer's passing.

- **Brown-Forman's Double Rejection:** Pernod Ricard merger-of-equals collapses over family governance disputes. Sazerac's $17B ($32/share) all-cash bid formally rejected. Brown-Forman faces third...

**Key Themes This Week:**

- Legal/regulatory disruption accelerating: Sixth Circuit strikes Ohio shipping law; Supreme Court may take up retail shipping cases May 14

- Tariff relief: 10% Scotch whisky tariff eliminated following King Charles state visit

- Beer showing cyclical recovery signs: ABI first volume growth since 2023; March shipments +2.5%; BPI above 50 for second consecutive month

- Spirits and wine under sustained pressure: Diageo US spirits -15.4%; total wine volumes at decade-low

- RTD/spirits-based cocktails as sole consistent growth driver across channels

- Distribution landscape in upheaval...

**Week of April 27 – May 1, 2026**

### Distribution Upheaval

- **RNDC dissolution accelerates**: Columbia Distributing acquires Oregon/Washington/Alaska; Martignetti takes 13 control states + brokerage in 4 more; Reyes Beverage Group closing on 11 states by late May; Manhattan Beer acquires RNDC-Opici NY distribution rights; Great Plains buyer TBD; Illinois JV in flux

- **2,774 WARN Act notices** issued across six states; Strauss Borrelli launches investigation in South Carolina

- **Brown-Forman** completes historic 18 control-state distribution realignment — Johnson Brothers, Southern Glazer's, Superior Beverage, Great Lakes Wine & Spirits named

- **Southern Glazer's** adds Edrington's full portfolio (incl...

**Week of April 20–24, 2026**

### Key Themes

- **Federal cannabis rescheduling** from Schedule I to Schedule III — the most significant US cannabis policy shift since state legalization began, with immediate financial implications for multi-state operators (Trulieve, Curaleaf, Verano, Green Thumb Industries) totaling ~$2B in potential 280E tax relief

- **Brown-Forman M&A battle** between Sazerac ($15B all-cash bid) and Pernod Ricard (80% stock / 20% cash merger of equals) — Brown family reportedly favors Pernod for strategic distribution access and greater ownership influence

- **Premiumization reversal confirmed** by IWSR: super-premium spirits value down 15% in 2025; total spirits value down 9...

**Major M&A & Corporate Moves**

- Sazerac tables $15B ($32/share) all-cash bid for Brown-Forman; Pernod Ricard pursuing parallel "merger of equals" talks; family governance structure is key differentiator

- Mark Anthony Brands acquires The Finnish Long Drink; spirits-based RTD pivot; brand posted +24% dollar and volume growth over trailing 52 weeks

- Uncle Nearest insolvent; receiver marketing all assets; $108M+ loan defaults; targeting going-concern sale by end of Q2

- Southern Glazer's integrates fine wine teams into Signature division; assumes national distribution for Frederick Wildman brands effective May 1

- Jackson Family...

**Major M&A & Corporate Moves**

- Sazerac formally approaches Brown-Forman, competing with Pernod Ricard's existing merger-of-equals discussions; BF shares surge ~14%

- E&J Gallo acquires Four Roses Bourbon from Kirin for up to $775M — pivoting away from declining wine

- Molson Coors' Monaco Cocktails acquisition scrutinized as potentially too small to compete with AB InBev's RTD portfolio

- Southern Glazer's acquires Eagle Rock Distributing's Colorado operations; 514 jobs lost across six facilities

- No Sleep Beverage launches with three-brand roll-up: Whiskey Del Bac, Nine Banded Whiskey, Ume Plum Liqueur

...

## SHOW NOTES

**Top Stories**

- **Pernod Ricard & Brown-Forman confirm merger talks** — potential $31B combined entity; Citi puts deal odds at 50/50; Jefferies projects $450M in synergies; governance and balance sheet challenges remain

- **E. & J. Gallo closes $775M Four Roses acquisition** — highest price ever for a Kentucky bourbon distillery; returns brand to US family ownership after 83 years

- **Diageo North America CEO Sally Grimes departs suddenly** — replaced by 30-year veteran John O'Keefe; comes as Diageo US spirits sales fall 11.6%

- **Southern Glazer's acquires ~22M ABI beer cases...

**Week of March 24–28, 2026**

**Top Stories:**

- **Pernod Ricard & Brown-Forman confirm active merger discussions** — potential "merger of equals" that would create joint #2 US spirits company; estimated $450M in cost synergies; Jefferies, TD Cowen, and ROTH weigh in on strategic logic, valuation, and Brown family governance hurdles

- **Uncle Nearest crisis deepens** — receiver seeks gag order and $75K sanctions against founder Fawn Weaver; $200M+ in total debts; employee resignations, distributor payment delays, and stalled asset sales

- **Stoli/Amber Beverage Group confirms loan default** — formal breach of loan note conditio...

**Major Themes This Week:**

- **Distribution consolidation accelerates:** Reyes Beverage Group expands RNDC acquisition to 10 states plus D.C.; SGWS acquires Clare Rose on Long Island; A-B InBev acquires Advance Beverage in Bakersfield, CA; SGWS faces federal indictment of former executives

- **Off-premise sales still declining:** Total alcohol dollars down -2.4% (NIQ 4-week) to -3.4% (TD Cowen 2-week); spirits ex-RTDs deepest at -6.6%; wine -5.3%; beer most resilient at -0.8%

- **RTDs are the only growth category:** Prepared cocktails +5.4% in dollars; Cutwater +116.3%, Surfside +240.3%, BuzzBallz +32.3%

- **Non-alcoholic beer surging:** +18.1% in latest Circana...

**Key Themes This Week:**

- US alcohol consumption hits record-low 54% of adults; structural demographic shift, not cyclical downturn

- Off-premise dollar sales declining across nearly all segments; prepared cocktails and RTDs the sole growth category

- Non-alcoholic beer continues double-digit growth but shows early signs of maturation

**Major Company Moves:**

- **Reyes Beverage Group** expands RNDC acquisition to 11 states (adding AZ, CO, LA, OK, TX); closing expected May 2026

- **Tilray Brands** acquires global BrewDog brand, Scottish brewery, and 11 UK pubs for ~$44M (~$66/bbl)

- **Diageo...

**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...