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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                                Coronavirus Update

                                Apr 22, 2022 - Ukraine War Could Worsen Aluminum Can Shortage
                                • Stores may have difficulty maintaining adequate supplies of products from small brewers and distillers due to the aluminum can shortage. After dropping in 2020 at the height of the pandemic, demand for aluminum grew 11% in 2021 as beverage can manufacturers, car makers, and other manufacturers increased production, according to the Aluminum Association. The global aluminum market has also been shaken by Russia’s invasion of Ukraine and the resulting sanctions on Russia by the US and its allies. Before the invasion, Russia accounted for about 6% of aluminum made in US smelters, according to industry insiders cited by The Wall Street Journal.
                                • In February 2022, 4.9% of retail workers quit or left their jobs, the second-highest percentage of any US industry sector after leisure and hospitality with 5.6%. In speaking about the overall level of quits in February, Daniel Zhao, senior economist at the career site Glassdoor, said, “These quits are still extremely high, and that shows the Great Resignation is still in full swing.”
                                • Russia’s invasion of Ukraine has also prompted some major alcoholic beverage companies to pull back from the Russian market. Beer giants Anheuser-Busch InBev, Carlsberg, Heineken all plan to exit Russia. Spirits brand owners Diageo and Pernod Ricard have suspended their exports to Russia. Several countries, including the US, have boycotted Russian vodka. Some US governors have ordered Russian vodka pulled from store shelves. The US boycotts and bans are primarily symbolic as Russian vodka only accounts for about 1% of total US vodka imports, according to the Distilled Spirits Council.
                                • Many analysts say that beer, wine, and liquor stores should prepare for an upcoming pandemic-related spending shift that is increasingly referred to as revenge shopping. Consumers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce-back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues. A significant portion of alcohol sales may shift from beer, wine, and liquor stores back to bars, nightclubs, and restaurants as a result.
                                • To help struggling bars and restaurants stay open early in the pandemic, more than 35 states eased their alcohol regulations to allow for to-go cocktail sales. The experiment was so popular with business owners and their customers that 17 states have passed legislation to make to-go cocktail sales permanent as of early April. Another 14 states have passed laws that extend their temporary permissions for to-go cocktail sales.
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