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
Aug 8, 2024 - Prices Rising
- Producer prices for beer, wine, and spirits merchant wholesalers rose 5.5% in July compared to a year ago after rising 4.8% in the previous July versus July annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by wine and spirits distributors grew 3.2% in July year over year, while average wages at alcohol distributors rose 5.7% over the same period to $27.23 per hour, BLS data show. Premiumization -- consumers trading up to higher priced alcoholic beverages -- is helping to support higher prices and rising labor costs for wine and spirits wholesalers.
- Tensions are brewing between craft distillers and spirits wholesalers following a recent article in Food & Wine magazine suggesting that US craft distilleries are in crisis. In short, the July article describes how a lack of distributors is inhibiting the growth of the craft spirits industry in the US and proposes legal direct-to-consumer (DTC) spirits shipping as a remedy, a solution opposed by the distributors who see DTC shipping of spirits as a threat to the three-tier system of alcohol distribution, and their livelihoods. The Wine and Spirits Wholesalers of America, the national trade group for wine and spirits distributors, in a press release, accused the American Craft Spirits Association (ACSA) of seeking to deregulate and dismantle the three-tier system put in place following prohibition under the guise of “modernization.” Former ACSA president Thomas Mooney blames the dominance of three distributors for the distribution challenges facing the craft spirits industry.
- The global beverage alcohol industry is fighting to keep warning labels that directly link alcohol consumption to cancer off of containers of beer, wine, and liquor in Ireland beginning 2026, The New York Times reports. The Irish law would require two labels that read: “THERE IS A DIRECT LINK BETWEEN ALCOHOL AND FATAL CANCERS” and “DRINKING ALCOHOL CAUSES LIVER DISEASE.” At meetings of the World Trade Organization, trade groups and 11 alcohol-exporting countries, including the US, expressed concerns, questioned the scientific validity of the cancer warning, and argued that Ireland’s labels would infringe on free trade, NYT reports. Currently, in the US, alcohol warning labels are typically found on the back of bottles or cans, where they’re relatively unobtrusive. Globally, only a quarter of countries require any kind of health warning on alcohol. A bill under consideration in Alaska would require businesses that sell alcohol to post warning signs.
- Declining demand for America’s best-selling whiskey brand reflects shifts in consumer spending and how people consume alcohol, The Wall Street Journal reports. Sales of Jack Daniel’s Old No. 7 have been falling for months, and its maker, Brown-Forman, is forecasting a sluggish US whiskey business for at least the next year, according to WSJ. Whiskey makers’ US revenue – which soared during the pandemic along with that of other spirits makers – fell 2.2% in 2023 to $12.3 billion, according to the Distilled Spirits Council of the United States, while revenue was flat overall for makers of spirits. Inflation and high interest rates have some consumers spending less on alcohol, while others are reducing their alcohol consumption for health reasons – or choosing marijuana instead – per WSJ. Meanwhile, some drinkers of Jack Daniel’s Old No. 7 – often used to make the popular cocktail Jack and Coke – are trading down for cheaper alternatives.
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