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Premiumisation ‘all but dead’, says SipSource report
The latest data from the Wine & Spirits Wholesalers of America (WSWA) warns consumers are not trading up but trending away from alcohol consumption.
The Wine & Spirits Wholesalers of America (WSWA) has released its SipSource Q4 2024 Industry Report, which found spirits depletions fell by 3.7% while revenue decreased by 4.3% in the US. Wine faced an even tougher time, with a 7.2% volume decline in 2024, and a 6.3% drop in value.
WSWA described 2024 for the alcohol industry as ‘one of its most challenging years in collective memory’.
The report mentioned consumer behaviours trending away from alcohol consumption as one cause for the decline, with heightened competition in the beverage space also contributing.
It also described the premiumisation trend of past years as ‘all but dead’, with the exception of a few categories – one being spirits-based pre-mixed cocktails.
“Shifting lifestyle choices – including the rise of moderation and abstinence trends – are reshaping consumption patterns,” SipSource analyst Dale Stratton said.
“Additionally, the industry is facing competition from alternative adult beverages like energy drinks, botanical-infused drinks, and hemp-derived products, which are increasingly winning traditional alcohol consumption occasions.”
Pre-mixed cocktails ‘reshaped supply chain’
Stratton added: “The rise of pre-mixed cocktails has completely reshaped the supply chain, with many producers opting to distribute these products through beer networks rather than traditional wine and spirits channels.”
The spirits-based pre-mixed cocktail category now represents 14.2% of the total spirits market in the US, up from just 3.2% five years ago and growing by 3.4% in volume and 3.5% in revenue in 2024.
Convenience stores emerged as the fastest-growing retail channel for spirits-based RTDs, growing by 14.1% in volume and 12.4% in revenue as some states adopted laws allowing them to be sold alongside beer and wine.
“The success of leading brands and variety packs underscores consumer demand for convenience, flavour variety, and experiential drinking occasions,” Stratton said.
Despite overall industry declines, SipSource reported an increase of 0.7% in total accounts selling wine and spirits in 2024, including a 28.1% increase in convenience stores alone. This was largely driven by spirits-based cocktails.
Additionally, the on-premise showed resilience, growing by 7.5% in total volume of accounts sold while the off-premise grew by 2.8%.
Despite headwinds, SipSource projects that if current trade policy remains the same, 2025 could be a year of stabilisation with minimum fluctuation expected across major categories
“While the challenges of 2024 have tested the resilience of our industry, we remain optimistic about the future, but not all market conditions will be within our control,” Stratton said. “Stabilisation in 2025 will pave the way for renewed momentum in 2026 as we adapt to shifting consumer demands and evolving market dynamics.”
In the 2024 third-quarter SipSource report, data suggested the US would continue to experience ‘significant headwinds’ over the next year.
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