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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                                    Coronavirus Update

                                    Apr 21, 2022 - Major Cities Drop Vaccine Requirements for Bars, Restaurants
                                    • Amid falling COVID-19 cases, vaccines requirements for indoor dining and bars are being lifted. Major cities that had required proof of vaccination for indoor dining – including New York, Los Angeles, San Francisco, Seattle, Philadelphia, and Boston - have since removed the requirement. As of April 4, 2022, 23 states had banned vaccine requirements, including mandates and passports.
                                    • Demand for wine in restaurants and bars may increase as pandemic conditions have improved and restrictions have eased. Hawaii, the final holdout among states with indoor masking mandates, let its mask mandate expire on March 25. The Centers for Disease Control and Prevention still recommends that masks be worn in areas of substantial or high transmission, regardless of vaccination status.
                                    • Some US wineries are reporting sharp upticks in prices for glass bottles, to the North Bay Business Journal. Some wineries have seen prices for bottles rise by as much as 20%, according to a recent report by Rabobank. The rise in prices has been chiefly for higher-end bottles imported from Europe. Glassmaking uses large amounts of natural gas, which has seen massive spikes in pricing since Russia’s invasion of Ukraine. Rabobank reports natural gas prices in Europe have risen as much as 550%. In the US, fuel costs account for about 10% to 20% of the cost of making glass bottles. In Europe, fuel accounts for 30% to 40% of bottle-making costs.
                                    • Americans’ drinking habits – what they drink and how much – are about the same as they were pre-pandemic, according to new research conducted by Echelon Insights. The result is contrary to the widely-held assumption that people are drinking more during the pandemic. While 1 in 5 respondents reported drinking more, nearly the same amount also reported drinking less. Nearly 60% of respondents reported no change in their drinking habits since the pandemic began. These results are in line with other public polling from 2020, which showed that most Americans reported drinking about the same during quarantine, including IUPUI, Morning Consult, and YouGov results.
                                    • Seasonally adjusted US sales at food services and drinking places rose 1% in March 2022 compared to February. On an unadjusted basis, sales rose 25.7% in the first three months of 2022 compared to the same period in 2021.
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