The spirits stockpile: ‘A strength becomes a constraint’
One of the least discussed consequences of changing drinking habits isn’t moderation or premiumisation – it’s inventory, says Mangrove Global’s Nick Gillett.
According to a recent report by the Financial Times, the spirits industry has an estimated US$22 billion stockpile of unsold, ageing stock – the highest level of inventory in more than a decade.
According to the managing director of Mangrove Global, that stockpile represents capital tied up in liquid that was forecast, financed and laid down for a drinking world that no longer quite exists in the way it was expected to.
He says: “This isn’t simply a forecasting error, nor is it purely bad luck. It’s the result of a perfect storm: a structural mismatch between how spirits are made and how people now choose to drink, compounded by an industry that underestimated both the speed and stickiness of behavioural change.
“Spirits are long-cycle products. Decisions taken five, 10 or even 20 years ago on capacity, inventory, ageing and expansion assumed demand curves that felt sensible at the time. Growth was expected to be steady, incremental and resilient. At the same time, the market continued to attract new challenger brands, new distilleries and more liquid, all competing for a finite number of drinking occasions.
“What wasn’t fully anticipated was how quickly consumption patterns could shift once moderation, selectivity and intention became mainstream rather than niche.”
He believes that consumers haven’t stopped celebrating, but are having fewer of those occasions, as well as drinking less per occasion and thinking more about what’s in the glass.
He continues: “From a distributor’s point of view, the tension is obvious. When behaviour changes faster than production models can adapt, the consequences ripple through the system: paused distilleries, reduced output, pressure on working capital and difficult conversations about what ‘growth’ really means. Inventory that once felt like a strength – aged stock, future optionality – can quickly become a constraint.”
Gillett stresses that the current situation shouldn’t be framed as a temporary correction before ‘normal service’ resumes. Rather than waiting for yesterday’s patterns to return, the industry needs to build for today’s reality.
“That means being honest about demand signals, not just production ambition,” he continues. “It means resisting the temptation to chase volume for its own sake. It means sharper portfolio discipline, clearer role definition for SKUs, and a willingness to align supply more closely with how, when and why people are actually drinking now.
“For distributors in particular, this moment demands clarity. Our role increasingly sits at the intersection of producer expectations and customer reality. The job is not to push more liquid into the system, but to help ensure the right liquid is in the right place, at the right scale, for the right occasions.
“None of this is comfortable. But discomfort is often where progress starts. The next phase of growth in spirits won’t be driven by assuming the past snaps back into place. It will come from adapting production, portfolios and partnerships to match a more selective, intentional drinking culture and having the discipline to act on what the market is already telling us.”
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