Beer, Wine, and Liquor Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 30,600 beer, wine, and liquor stores in the US sell alcoholic beverages to individuals and businesses. They are the third tier in the three-tier system of manufacturers, distributors, and retailers. Eighteen US states operate state-controlled liquor stores, known as Alcohol Beverage Control (ABC) stores.

Competition from Big Box Stores

Supermarkets and convenience stores that are permitted to market and sell alcohol have several advantages over liquor stores.

Regulations Affect Operations

Alcohol retailers are one of the most tightly regulated retail industries.

Industry size & Structure

An average beer, wine, or liquor store has 6 employees an generates $2.3 million in annual revenue.

    • 30,600 US firms generate $71.5 billion in revenue with 178,200 employees.
    • 88% of firms are single establishments.
    • The top 50 firms account for 24% of sales and 16% of employees.
    • 46% of all revenue comes from stores with fewer than 10 employees.
    • There are currently 18 monopoly or "control" states in the US where the state controls the distribution or retailing of alcohol. Of these, 10 states and one jurisdiction operate retail outlets: Alabama, Idaho, New Hampshire, North Carolina, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia, and Montgomery County in Maryland.
    • Large chains include BevMo, Total Wine & More, and Government-controlled ABC (Alcoholic Beverage Control) Stores.
                                Industry Forecast
                                Beer, Wine, and Liquor Stores Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                May 8, 2023 - Damp Drinking Trend
                                • Gen Z and millennial drinkers are most likely to show interest in “damp drinking,” according to a survey by Morning Consult. The viral TikTok trend, which has garnered more than 42 million views, is about taking a mindful approach to reduce alcohol consumption without giving it up altogether – in other words, drinking in moderation. While only 15% of all US adults are familiar with the term, that share rises to roughly 3 in 10 among TikTok users, as well as among millennials (31%) and Gen Z adults (35%) who drink alcohol. Over half (55%) of drinkers who said they’ve heard of damp drinking are “very interested” in trying it out, according to the April survey. Given that younger drinkers are an important demographic for adult beverage brands, alcohol brands and retailers will want to prioritize growing and stocking low-alcohol and no-alcohol alternatives.
                                • A bill that would allow state agency liquor stores in Montana to remain open on holidays and Sundays has won approval by state lawmakers and is headed to the governor’s desk, the Distilled Spirits Council of the United States reported in May. Montana is one of only seven remaining US states that prohibit Sunday sales. If enacted, House Bill 867 would fully allow sales of distilled spirits products from state agency liquor stores on Sundays and Mondays. There are 93 agency liquor stores (aka state liquor stores) throughout Montana that purchase liquor directly from the state’s main distribution warehouse. Opponents of the bill say its passage would give agency stores an unfair advantage over package stores and bars by being open similar hours, being guaranteed a commission on every bottle purchased, and having as long as 60 days of credit from the State of Montana, Great Falls Tribune reported in April.
                                • Liquor stores in Colorado could see less foot traffic and be forced to specialize in more niche products to survive now that the state allows wine sales in grocery stores, according to a recent Colorado State University study. The CSU study found that after Colorado approved beer in grocery stores in 2019, there was a 5% decrease in foot traffic in liquor stores. But now that wine has been added, CSU professor Marco Costanigro, one of the study’s co-authors, said “I expect that more marginal liquor store businesses will have a harder time.” The sale of wine in Colorado grocery stores that began in March likely will further erode the share of liquor sales that happen in liquor stores. Previously, the expansion of both beer and wine in Oklahoma decreased monthly visitation at both rural (9%) and urban (7%) liquor stores, the study found.
                                • Cocktail beers – brews inspired by classic cocktails – are slowly gaining in popularity, reports. A niche within the craft beer scene, cocktail beers are a way for brewers to innovate while providing craft beer drinkers with even more options in the already diverse craft beer market. Brewers of cocktail beers draw their inspiration from classic cocktails like the rum-based Dark ‘N Stormy, the inspiration for a cocktail beer from the Firestone Walker Brewing Company, which has been making cocktail-inspired brews since 2017. While brewers are hesitant to anoint cocktail beers a full-fledged trend – akin to hard seltzer – they hope the beverages will attract people who aren’t typically beer consumers to the craft beer scene. “I think it does draw in consumers because cocktails have become a big part of the retail market,” said Fal Allen, brewmaster at Anderson Valley Brewing Co., a maker of cocktail beers.
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