Wine & Spirits Distributors NAICS 424820

Jun 8, 2025 - Forecast Predicts Flattening Decline

• New depletion trend data for wine and spirits signals a bottoming out of downward trends in key categories, according to the latest SipSource quarterly forecast. The 2025 outlook is for negative growth rates to stabilize by yearend, signaling a shift away from the steep and growing decline levels seen between 2022 and 2024. In total, SipSource projects core spirits (including vodka, whiskey, rum, and gin) to bottom out at a negative 4.56% growth rate by the end of 2025 before rebounding slightly to decline at a negative rate of about 4.1% by Q2 2026. The steep downward trend and negative growth rates seen for rum, US whiskey, vodka, and brandy/cognac are expected to largely flatten by the first half of 2026, albeit in negative territory, per the SipSource report.
• The global wine industry is bracing for the financial impact of President Trump’s 20% import tariff on all goods from the European Union, including wine. While the 20% tariff announced on April 2 is far less than the 200% Trump initially threatened in March, the new tariffs will affect everyone from distributors to restaurants to consumers, according to the Wine & Spirits Wholesalers of America, which notes that imported wine makes up 38% of the US marketplace. Beyond the EU, wines imported from other countries – including Argentina, Chile, Australia and New Zealand – will face 10% tariffs, while wines from South Africa will face a 30% duty and wines from Israel will be tariffed at 17%. Higher costs are the last thing the wine industry needs right now with wine sales falling due to lukewarm interest from younger consumers and competition from spirits and other alcoholic and nonalcoholic beverages.

• 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.”
• Employment by wine and spirits distributors shrank 1.3% in March compared to a year ago while average industry wages rose 6.8% over the same period to $27.16 per hour, easing from their record high in December, according to the latest US Bureau of Labor Statistics data. Rising producer prices – up 1.1% year over year in March – are helping to mitigate rising wages – up almost 25% over the past decade – amid falling sales. Premiumization, which had been the driving force behind the spirits industry’s success, is facing pressure in a tightening market as consumers trim their spending on expensive wines and spirits.