Southern Glazer’s: data insights into distribution in the US
Zachary Poelma, senior vice-president of commercial intelligence at Southern Glazer’s Wine & Spirits, shares the latest on-the-ground insights into the spirits industry in the US.
“A couple of years ago at our leadership meeting, we laid out our 2030 vision, which was to be the hospitality industry’s most-valued selling, logistics and insights provider,” Poelma notes on this week’s episode of The Spirits Business Podcast. As senior vice-president of commercial intelligence at the biggest alcoholic beverage distributor in the US, Southern Glazer’s Wine & Spirits, Poelma has a deep well of intel when it comes to consumer drinks behaviours in the States.
“Going back to 2011, since I first joined Southern Glazer’s and really got involved in this industry, I’ve never seen trends change as fast as they have probably the past couple of years,” he explains.
“Leading into Covid, we were typically an industry where you’d see anywhere from 1% to 2% of volume growth each year. You’d see a few points of price mix built on top of that. So there’s a very consistent mid-single-digit growth kind of formula that has been in place for 10 and 20-plus years.”
Coming out of Covid, however, he seemed to notice an emerging theme or trend almost every day. “Immediately coming out [of Covid], it was all about super-premium items,” he says. “People were willing to spend US$100/US$200 on an item.
“Then, all of a sudden, we got to 2024 and premiumisation almost fell off a cliff. You saw downtrading [from] maybe US$50 to US$100-plus Tequila into US$25 to US$30 Tequila.
“At the same time – and this is where I think the trends get really interesting – you were still seeing from that value segment – so under US$10 or US$15 – they were actually still trading up into that US$20 or US$25 space.
“You had this convergence from the highest end, where consumers were returning to a more normalised spending pattern, and consumers at the lowest end of the price tier that had tasted something better and still wanted to continue to trade up to better products that maybe were additive-free, or products that were 100% agave.”
The spirits landscape in the US is complex, with rules and regulations differing from state to state. Despite multiple challenges facing the industry, there is still a wealth of opportunity for brands to win, Poelma believes. Southern Glazer’s Wine & Spirits has remained active and, in August this year, the company agreed to acquire the New York City distribution arm of brewing giant Anheuser-Busch.
“This kind of total-beverage strategy that our ownership and senior leadership are now pursuing – that’s what makes us unique in the distribution sector today, that ability to continue to invest behind the business,” Poelma adds.
He shares further data and insights throughout the podcast episode, and discusses key challenges for spirits in the US and his outlook for the future.
The episode with Poelma is now available to listen to on all major streaming platforms, including Apple Podcasts, Spotify and Amazon Music. It is also available to listen to for free via the link below and on the Acast website.
Last week’s episode featured Emily Harris, founder and director of award-winning PR agency May Fox Communications, who discussed in detail how brands can harness the power of PR to succeed.
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