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

                                    Nov 3, 2022 - Sales of Premium Spirits Rise
                                    • Defying decades-high inflation, sales of premium spirits increased in the second quarter compared with the same quarter last year. As measured by the Distilled Spirits Council of the United States (DISCUS) Luxury Brand Index (LBI), which tracks sales of top-end spirits brands, tequila posted the largest increase with a 43% annual growth rate followed by American whiskey, up 30% year over year. Scotch whiskey, Cognac, and Irish whiskey rose 13%, 9%, and 7%, respectively. Historically, the spirits sector has proved resilient during hard economic times and Q2 2022 was no exception. Between Q2 2017 and Q2 2022, all spirits categories included in the LBI increased their annual growth ranging from 8% (Scotch and Japanese whiskey) to 45% (tequila and American whiskey), with an average rate of 24%, according to DISCUS.
                                    • Exports of US spirits are rebounding following the suspension of European Union and UK retaliatory tariffs on American exports, according to a new export report from the Distilled Spirits Council of the United States (DISCUS). The report found that from January through July 2022 total US spirits exports, including American whiskey, increased by 21% and 22%, respectively, year over year. Total 2021 US spirits exports increased 14% compared to 2020, reaching $1.6 billion. The US and EU agreed in October 2021 to suspend the EU’s 25% retaliatory tariff on American whiskeys for two years effective January 1, 2022. And in June 2021, the US and EU agreed to lift retaliatory tariffs on American rum, brandy, and vodka for five years effective in July. The US and UK agreed in March 2022 to remove the UK’s 25% retaliatory tariff on American whiskeys as of June 1.
                                    • Citing public health and safety concerns, wine and spirits wholesalers in 34 states joined the Wine and Spirits Wholesalers of America (WSWA), National Beer Wholesalers Association, and other groups to urge Congress to oppose HR 3287 – the United States Postal Service Shipping Equity Act. The bill would allow the USPS to mail beverage alcohol products directly from licensed producers – including breweries, distilleries, wineries, and cideries – to legal-drinking-age consumers in states that allow direct-to-consumer (DTC) alcohol shipping. The bill’s opponents cite dangers including increased underage access and increased access to dangerous counterfeit products that may result from DTC models of distribution.
                                    • A majority of American mothers are concerned that direct-to-consumer (DTC) shipping of spirits will increase underage access and access to dangerous counterfeit products, a new study conducted by the Wine & Spirits Wholesalers of America (WSWA) and Morning Consult has found. The nationwide survey of some 2,000 mothers was conducted ahead of upcoming legislative sessions in New York and Texas – two states that will take up DTC spirits shipping bills when their legislative sessions open in 2023. Among the study’s most powerful findings was the near-unanimous (91%) agreement among American mothers that underage drinking is important for lawmakers to consider when deciding alcohol laws and regulations, with a majority (73%) considering this “extremely important,” WSWA reports. Despite geographic, cultural, and partisan differences 73% of mothers in New York and Texas are concerned that DTC shipping of liquor/spirits across state lines will increase underage access to alcohol.
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