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 2,100 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 is about 41%.

Potential Regulatory Changes

Legal challenges to the current federal three-tier system for alcohol distribution could change the relationships between suppliers, distributors, and retailers.

New Product Proliferation

Liquor suppliers are focusing on product innovation and line extensions as a way to position themselves in the future marketplace.

Industry size & Structure

The average wine and spirit distributor has about 40-41 employees and generates $44 million in annual revenue.

    • The US has about 2,100 wine and spirit distributors with annual sales of about $94 billion and 88,300 employees.
    • The largest populations of wine and spirit distributors include California, New York, Florida, Illinois, Texas and New Jersey.
    • 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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Mar 6, 2023 - Sake Sales Soar
                                    • Sales of sake – a Japanese alcoholic beverage made from fermented rice – are booming globally and in the United States, The New York Times reported in February. Japanese exports more than doubled in volume from 2012 to 2022, from roughly 14 million liters per year to nearly 36 million liters, according to trade group Japanese Sake and Shochu Makers Association, NYTs reports. Exports to the United States over that period grew to more than nine million liters per year, up from just under four million liters. While sake produced in the US accounts for a small fraction sold domestically, sake breweries are popping up across the country, with a 24,000-square-foot brewery slated to open in May in Hot Springs, Arkansas that will be the nation’s largest. (Arkansas is the nation’s leading rice producer.)
                                    • A bill introduced in the Texas Legislature in February would allow spirits ready-to-drink cocktails (RTDs) to be sold in grocery and convenience stores alongside beer- and wine-based beverages that have a similar alcohol content, according to the Distilled Spirits Council of the United States (DISCUS). The trade association cites a recent survey that shows consumers support greater access to these products, including in grocery and convenience stores, with 86% agreeing that spirits RTDs should be sold where beer and wine are sold. “As spirits RTDs gain in popularity, states all across the US are taking a look at beverage laws to ensure consumers of these products are being treated fairly, and Texas consumers should not get left behind,” said Chris Swonger, president and CEO of DISCUS. Other states with pending legislation related to spirits RTDs include Arizona, California, and Washington.
                                    • The number of regular wine drinkers in the United States and around the world has fallen since 2015, Wine Business reported in January. While 37% of people of legal-drinking age in the United States were regular wine drinkers in 2015, by 2022 that percentage had shrunk to 35%, according to Wine Intelligence data. Overall, there were about 84 million regular wine drinkers in the US last year. The big opportunity for the domestic wine industry is the 29% of US consumers who drink beer and spirits but not wine – about 74 million people of legal-drinking age, according to Wine Business. While fewer people are drinking wine, those who are continue to trade up -- a trend known as premiumization. Alcoholic beverage value growth continues to outpace volume growth globally, according to Wine Business.
                                    • In March, Colorado became the 40th US state to allow wine sales in grocery and convenience stores, according to the National Association of Convenience Stores (NACS). The state has allowed beer sales in grocery and c-stores since 2019. Colorado joined 39 other states following the narrow passage (50.58% of votes) of Proposition 15 in November 2022. Proposition 125 was one of three alcohol-related measures on Colorado's 2022-midterm election ballot and was the only proposition to pass. Proposition 124, would have allowed liquor stores to open unlimited locations, while Proposition 126 would have continued to allow third-party delivery services, such as DoorDash and Instacart, the ability to deliver booze, NACS reports. Connecticut is currently considering allowing wine to be sold in grocery stores.
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