This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
News
US spirits face year-long ‘headwinds’
Spirits in the US will continue to experience ‘significant headwinds’ over the next year, while growth is slowing for pre-mixed cocktails.
The Wine & Spirits Wholesalers of America (WSWA) released its third quarter (Q3) 2024 SipSource report, which analyses sales from US wholesalers to more than 450,000 retailers nationwide.
Earlier this month, SipSource predicted that spirits sales would continue declining during the first half of 2025 as premiumisation slows down. Based on WSWA’s data sources, the spirits sector is expected to decrease by 5.65% for the 2024 full year.
SipSource’s Q3 report notes that spirits ‘appear to be stabilising in negative territory’ after 30 months of continued declines.
Comparing current data, spirits volume fell by 3.3% in June 2024 compared to 3.2% in the same month last year.
However, SipSource said spirits volume remains positive over the last five years due to the high growth rates the category experienced between 2020 and 2022.
According to the SipSource forecast team: “These Q3 results continue to support the forward-looking projections in which we predict core spirits will continue to face significant headwinds over the next 12 months.
“This continues the trend we have seen over the last 24 months as core spirits consumption gives back gains from the Covid-19 period and moves towards pre-Covid norms.”
Spirits volume is surpassing revenue by 40 basis points, which SipSource has attributed to a lack of premiumisation. A main contributor to this gain was the growth of pre-mixed cocktails, which became the second-largest spirits category by volume but only ninth by revenue.
However, SipSource revealed that growth is slowing down for pre-mixed cocktails, which rose by 6.2% in the year to September 2024.
American whiskey, vodka and gin continue to premiumise, SipSource added, but agave spirits and brandy/Cognac revenue trends are struggling to keep up with volume changes.
Danny Brager, SipSource analyst, added: “This quarter’s data reflects significant shifts in consumer preferences amid economic uncertainties and tight inventory controls.”
The SipSource team anticipates a ‘challenging market with no significant turnaround in trends’ as consumer debt reaches an all-time high.
Related news
Bedford Stone Street arrives in New York