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

                                    Jun 28, 2022 - Survey: Tequila Top Spirit in US
                                    • Tequila-based ready-to-drink (RTD) cocktails are the top alcoholic drink Americans most want to try, according to the most recent Consumer Trend Report released by Drizly, the Uber-owned alcohol e-commerce firm. Of those surveyed, 43% most want to try RTD tequila cocktails, followed by American whiskey at 36%. Overall, RTD cocktails ranked as the top adult beverage consumers say they plan to buy in 2022, with 73% of respondents saying they would most likely drink RTD cocktails at home, which Drizly suggests some erosion of the home mixology trend.
                                    • Wine and spirits distributors are likely feeling the pinch of higher fuel prices. Oil prices were already steadily pushing higher on increased demand when Russia’s invasion of Ukraine roiled global oil markets. For the week ending June 10, the spot price for a gallon of Gulf Coast ultra-low sulfur diesel was up 110% compared to the same week in 2021.
                                    • A new firm, Vintners.co has launched a B2B online platform that hopes to connect craft wine producers with wholesalers and professional wine buyers, according to Bar & Restaurant. The new digital marketplace offers enhanced wine product information management between craft wine producers, importers, distributors, and their customers. Vintners.co also streamlines the ordering process for craft wines and enables fast discovery of rare wine products sought by wine retailers and restaurants.
                                    • Some US wineries may be experiencing sharp upticks in prices for glass bottles, according to supply chain risk management firm Resilinc. 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. Resilinc said smaller wineries were more likely to be affected than larger ones due to small firms’ weaker buying power. Some industry watchers suggest higher bottle prices may persist into 2023. In May, US producer prices for glass containers were up 12.3% compared to a year earlier.
                                    • Demand for wine in restaurants and bars may increase as pandemic conditions have improved and restrictions have eased. Seasonally adjusted US sales at food services and drinking places rose 0.6% in May 2022 compared to April. On an unadjusted basis, sales rose 16.8% in May compared to the same month in 2021.
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