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 2,170 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
Industry Forecast
Wine & Spirits Distributors Industry Growth
Source: Vertical IQ and Inforum

Recent Developments

Feb 8, 2024 - Wages Fell in 2023
  • Producer prices for beer, wine, and spirits merchant wholesalers rose nearly 2% in 2023 after climbing 13.5% in 2022. Employment by wine and spirits distributors grew by 1.4% while average industry wages for employees of alcohol distributors fell 3.5% over the same period to $25.41 per hour. Sales for the US wine and spirits distributors industry are forecast to grow at a 4.21% compounded annual rate from 2023 to 2027, comparable to the growth of the overall economy, according to the Interindustry Economic Research Fund.
  • The beverage alcohol industry faces a challenging road ahead in 2024, according to a January press release from the Wine & Spirits Wholesalers of America (WSWA). Wholesaler inventories for wine, spirits and beer are at historic highs as US consumers and retailers pull back, SipSource depletion data shows. Economic headwinds confronting wholesalers include inflation, interest rates, and consumer debt, which continue to impact US consumer spending habits. Generational trends are also impacting demand and the industry needs to respond to today’s more diverse customer base and changing tastes, warns SipSource analyst Danny Brager, noting that today’s more diverse consumers are embracing spirits more than wine. In a constrained market, wholesalers need to focus on in-demand categories including ready-to-drink (RTD) premixed cocktails, and tequila. Higher-end price tiers are expected to continue to slow, with the best rates of growth in the mid-priced groups.
  • The Congressional 21st Amendment Caucus was formed in December, marking the 90th anniversary of the amendment's ratification, according to the Wine & Spirits Wholesalers of America (WSWA). The 21st Amendment, whose creation coincided with the end of Prohibition, grants US states virtually complete control over whether to permit the importation or sale of liquor and how to structure the liquor distribution system. “This new caucus will educate policymakers about the importance of the alcohol industry’s effectively regulated chain of custody, which keeps consumers safe and promotes competition and variety while ensuring revenue is collected in the form of excise and sales taxes,” per a WSWA press release that adds caucus’s creation is timely as special interests are seeking to change or weaken these regulations. Threats to the current liquor distribution system include direct-to-consumer shipping of alcoholic beverages, which bypasses wholesalers.
  • The global organic wine market is poised for significant growth, according to market research firm Grand View Research. The global market for organic wine, estimated at $8.9 billion in 2021, is anticipated to expand at a compound annual growth rate (CAGR) of 10.2% from 2022 to 2030. The US market is expected to grow a bit more slowly: at a CAGR of 9.9% between 2022 and 2030, according to the report. Organic wine is produced from grapes grown using organic agricultural practices, which does not include the use of artificial chemical fertilizers, pesticides, fungicides, or herbicides. The industry is primarily driven by consumers’ growing awareness of health issues as well as concern among some wine drinkers over how grapes are grown, how workers are treated, and how wine is packaged.
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