The US Booze Industry Is Not Doing Well

The party’s over and the hangover is just starting for the alcohol industry. According to a new report by SipSource (as reported by Wine-Searcher), wine sales from wholesalers to retail stores, restaurants and bars dropped 8% in the 12 months that ended August 2024, and spirits sales fell 3.9%.

And all those expensive bottles we were buying during the pandemic? That, apparently, was just a brief trend. Expensive spirits (bottles that retail for over $100) were down 8.5% in retail stores and 12.5% in bars and restaurants.

“I really did think at some point I’d be able to stop talking about COVID impacts but they’re still there,” SipSource analyst Dale Stratton told Wine-Searcher. “During that [20]21 to ’23 period, there was a crazy spike in tequilas over $100. There were a whole bunch of people who couldn’t travel. Their disposable income went up. They went out and bought their over-$100 tequila and had a couple sips of it. But that bottle is still sitting there. That buyer has moved down to the next price level. And is buying less.” (That said, one of our writers contends the tequila industry is doing just fine.)

The Global Spirits Industry Is Officially “Tumultuous”

A new report by The Spirits Business suggests a rather wide range of good and bad news for larger drinks brands

Was there any good news? A bit. Sales of wines over $50 and Prosecco were up slightly. Conversely, sales of cheap wine ($8-$11 per bottle) were down 12.7%.

Wine-Searcher combined the SipSource stats with recent consumer price index numbers and came to the conclusion that there’s a growing urban population that drinks less per capita, and those urban Americans who are drinking are spending about the same amount for alcohol but “getting less bang for [their] bucks.” In other words, it’s the younger generation drinking less and inflation, two common excuses that seem to be proving true.

Interestingly, there doesn’t seem to be much panic in the industry. Stratton thinks the sales slump will cool off and the holidays could bring a sales boost. And the domestic whiskey industry continues to build new massive new distilleries, looking toward other countries and the rise of booze tourism as growing markets. It may take a few years to figure out if these current sobering sales numbers are just a bump in the road or an unfortunately real trend.