Wine & Spirits Distributors
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 2,200 wine and spirits distributors in the US represent the second tier of the federal three-tier system of approved alcohol distribution. This system, which has been in place since the lifting of Prohibition, requires that a supplier sell to a distributor, who then sells to a retailer (bar, restaurant, grocery store, liquor store, or other consumer-oriented channel). Spirit sales account for 56% of industry revenue, while wine accounts for about 41%.
Regulatory Changes
Challenges to the current federal three-tier system for alcohol distribution could disrupt the relationships between suppliers, distributors, and retailers.
New Product Proliferation
Liquor suppliers are focusing on product innovation and line extensions to position themselves in the future marketplace.
Industry size & Structure
The average wine and spirit distributor has about 44-45 employees and generates $43 million in annual revenue.
- The US has about 2,200 wine and spirit distributors with annual sales of about $94.5 billion and 98,000 employees.
- California, New York, Florida, Texas, Illinois, and Colorado have the largest populations of wine and spirit distributors.
- 79% of distributors operate a single warehouse.
- The wine and spirits wholesale industry is concentrated: The top 50 companies account for 82% of industry revenue.
- Large distributors in the US include Southern Glazer's Wine and Spirits, Republic-National and Breakthru Beverage Group.
Industry Forecast
Wine & Spirits Distributors Industry Growth
Recent Developments
Feb 8, 2025 - Prices Are Rising Amid Falling Sales
- Producer prices for beer, wine, and spirits merchant wholesalers rose 5.5% in December compared to a year ago after increasing 2.4% in the previous December-versus-December annual comparison, according to the latest US Bureau of Labor Statistics data. Producer prices rose despite declining sales for distributors, which tumbled 9.4% year over year in November and fell 4.6% versus October, and rising inventories, according to the Census Bureau, as consumers trimmed spending on premium products. Employment by wine and spirits distributors was unchanged YoY in November, while average wages at alcohol distributors rose 6.5% over the same period to $27.11 per hour, BLS data show.
- Year-end data from the Wine & Spirits Wholesalers of America’s (WSWA) trend tracker SipSource show 2024 was a challenging year for distributors. In 2024, total wine and spirits volume and revenue declined 5.5% and 5%, respectively, over the 12-month period. Spirits outperformed wine with volume and revenue down 3.7% and 4.3%, respectively, while total wine volume fell 7.2% and revenue was down by 6.3% year over year. Looking ahead, SipSource analysts expect favorable comparisons in Q1 to produce “slow but marked improvements” despite challenges including changing consumer preferences, potential tariffs on imported single-origin products like tequila, and supply chain disruptions. “In 2025, we should expect to see less impact from inventory management at the retail level,” said SipSource analyst Dale Stratton, adding “Retailers can only destock so far before failing to meet their consumers’ needs.”
- Distributors of wine and spirits are struggling as US sales decline, The Spirits Business reported in October citing data from the Wine & Spirits Wholesalers of America (WSWA). The WSWA data, which looked at sales from wholesalers to more than 450,000 retailers nationwide, showed a combined decline of 6% for wine and spirits in the 12 months ending in August, with spirits sales falling 3.9% and wine declining 8%. The decline was seen in both the on- and off-premise channels. The WSWA notes the recent decline in sales signals potential challenges for the rest of 2024 and 2025. The report highlights how premiumization, once a major growth driver, is facing pressure in a tightening market. The $100-plus price tier in spirits in bars and restaurants performed worst, declining 12.5%, while mid-range tiers, such as $50-$99.99, saw a more moderate decline of 3.9% in on-premise depletions.
- Resilient consumer spending and a hiring surge for bars were among the factors behind the “shockingly robust September jobs report,” The Wall Street Journal reported in October. The leisure and hospitality industry was the top performer, accounting for 78,000 of the 254,000 jobs added in September, per the Labor Department. Hiring surged at food and drinking establishments to 69,000 in September – well above the average monthly gain of 14,000 over the past 12 months – accounting for the lion’s share of the industry’s 78,000 job gain. Wage growth that’s outpacing inflation, lower gas prices, and stock market gains have some consumers feeling flush. Rising traffic to bars and restaurants are drivers of demand for wine and spirits.
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