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 30,500 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 5 employees an generates $2.2 million in annual revenue.

    • 30,500 US firms generate $67 billion in revenue with 160,000 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

                                Dec 5, 2022 - Mixed Results on Alcohol-Related Ballot Items
                                • A trio of alcohol-related measures on the midterm ballot in Colorado in November returned mixed results for liquor stores in the state. In a win for small liquor store operators, Proposition 124 – the Retail Liquor Store Licenses Initiative – which would have allowed liquor stores to open unlimited locations was soundly defeated. The “no” vote leaves in place the current state law, which limits retailers to opening a maximum of three liquor stores. A second ballot item, Proposition 126, which would have continued to allow third-party delivery services, such as DoorDash and Instacart, to deliver booze, also was voted down, NACS reported. However, liquor stores in Colorado will face new competition beginning in March, 2023 when the state joins 39 others in allowing wine sales at grocery and convenience stores following the narrow passage (with 50.58% of votes) of Proposition 125.
                                • Consumers of fine wine are buying more of it, but there are fewer of them to sustain the premiumization trend, beverage alcohol business analyst Danny Brager told wine industry professionals at a November 2022 conference. “The core and marginal wine consumer base is shrinking,” he said citing Wine Market Council research, adding “There's not as many now as there were.” Brager warned producers of higher-end wines to pay closer attention to changing consumer demographics – in particular younger and culturally diverse consumers. The share of core (drinkers of at least a glass of wine a week) and marginal (those who drink at least one glass a quarter) wine drinkers of all adult beverages is highest for the oldest segments (19% for ages 60–69 and 23% for age 70-plus), but tapers off in younger generations (to 16% core and 13% marginal for ages 20–29).
                                • Defying decades-high inflation, sales of premium spirits increased in Q2 2022 compared with the same quarter last year. As measured by the Distilled Spirits Council of the United States (DISCUS) Luxury Brand Index (LBI), which tracks sales of top-end spirits brands, tequila posted the largest increase with a 43% annual growth rate followed by American whiskey, up 30% year over year. Scotch whiskey, Cognac, and Irish whiskey rose 13%, 9%, and 7%, respectively. Historically, the spirits sector has proved resilient during hard economic times and Q2 2022 was no exception. Between Q2 2017 and Q2 2022, all spirits categories included in the LBI increased their annual growth ranging from 8% (Scotch and Japanese whiskey) to 45% (tequila and American whiskey), with an average rate of 24%, according to DISCUS.
                                • A majority of American mothers are concerned that direct-to-consumer (DTC) shipping of spirits will increase underage access and access to dangerous counterfeit products, a new study conducted by the Wine & Spirits Wholesalers of America (WSWA) and Morning Consult found. The nationwide survey of some 2,000 mothers was conducted ahead of upcoming legislative sessions in New York and Texas – two states that will take up DTC spirits shipping bills when their legislative sessions open next year. Among the study’s most powerful findings was the near-unanimous (91%) agreement among American mothers that underage drinking is important for lawmakers to consider when deciding alcohol laws and regulations, with a majority (73%) considering this “extremely important,” WSWA reports. Despite geographic, cultural, and partisan differences 73% of mothers in New York and Texas are concerned that DTC shipping of liquor/spirits across state lines will increase underage access to alcohol.
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