Consumers Impacted by Rising Costs; SipSource
Subscribers "Not Surprised" by Market Conditions and Major Spirits
Companies' Earnings Reports
WASHINGTON, Aug. 8, 2024
/PRNewswire/ -- Wine & Spirits Wholesalers of America's
(WSWA's) SipSource, the leading authoritative source for U.S. wine
and spirits marketplace performance, fueled by WSWA wholesaler
member company depletion data and providing unparalleled coverage
of the U.S. market, today released its Q2 2024 Report. The report
tracks data over a 12-month period (July 2023-June 2024) and highlights key trends and
statistics for both wine and spirits categories, demonstrating
dynamic changes and market performance.
The Q2 2024 Report introduces the Accounts Sold and Points of
Distribution metrics enhancement, which count unique sales rather
than total physical volume. Accounts Sold tracks distinct outlets
with sales, while Points of Distribution counts the number of
products sold at the category level in each outlet.
Spirits Category Performance
Currently, the only
product classes seeing growth are Premixed Cocktails and
Tequila/Agave spirits. By comparison, in June 2022, only four of the 13 SipSource product
classes trended negatively.
Tequila Reposado continues to dominate the spirits segment with
impressive growth. Tequila Reposado is up +10.7%, showcasing
resilience in premiumization, with products over $50 increasing by +25.0% and representing 32.8%
of volume. Geographically, regions east of the Rocky Mountains are
driving this growth, all showing increases of over +19%.
In contrast, the Tequila-Other segment—any agave-based product
that is not silver, reposado, or añejo—shows growth driven by
lower-priced products. "Products under $17 in the Tequila-Other segment are up +12.9%,
with balanced growth between off-premise (+7.6%) and on-premise
(+5.5%)," said SipSource Analyst and industry veteran Dale Stratton. "The South-Central region saw the
strongest increase in points of distribution, up +11.9%."
"Premixed Cocktails remain both a blessing and a curse for the
spirits category. The continued volume growth is clearly a
positive, but lower prices are driving overall revenue down for the
category," explained Stratton. "There are also logistical
challenges in the supply chain, as the packaging and turnover rates
for these products are more like beer than traditional spirits or
wine." Premixed Cocktails now account for 14.9% of total spirits
volume compared to 3.9% in June
2020.
Wine Category Performance
Prosecco remains the top
performer in the wine category. Prosecco's growth is moderate but
still up +2.6% in the latest June-ending data. Growth is balanced
across off-premise and on-premise channels, with points of
distribution in the club/warehouse channel up +8.8%, indicating
continued growth potential.
Wine Cocktails present a mixed performance. "Canned products
within wine cocktails are growing +22.1% in volume and +29.5% in
points of distribution, while glass and PET packaging are in
decline," explained Stratton. "Future growth will heavily rely on
canned packaging, which currently holds a 37.3% share of points of
distribution."
"The story for the wine category is very different from spirits,
as current trends are generally in line with what we have
experienced in recent years. While we are not happy with where
these trends have stabilized, there is consistency at a macro
level," said Stratton.
Total wine depletions are down 8.2% ending in June, which is
only 70 basis points worse than two years ago when volume was
trending down 7.5%. One issue for the Table Wine category remains
the significant volume, 54.3%, that is sold below $8. This makes growth in the category unlikely in
the near future.
The Consumer Impact
The impact of inflation on
consumer spending seems to be moderating, but increased prices
remain a key topic in consumers' minds. In NIQ's 2024 Consumer
Outlook report the leading concern of those polled was rising food
prices, with 36% citing it as their number one concern. The overall
Consumer Price Index (CPI) in June increased +3.0% compared to the
previous month. The CPI for food was +2.2%, and for alcohol,
+1.8%.
SipSource's Competitive Edge
WSWA's SipSource remains
a crucial resource for industry professionals. "SipSource
subscribers are the most informed and least surprised when it comes
to the current wine and spirits marketplace performance,"
emphasized SipSource Director and WSWA EVP of Strategic
Communications and Marketing Michael
Bilello. "None of the major spirits companies' earnings
reports have come as a surprise to our subscribers."
In the coming weeks, SipSource subscribers will receive an
exclusive briefing on the marketplace, providing deeper insights
and detailed analysis to aid in strategic decision-making. Contact
Eric Schmidt (eric.schmidt@wswa.org)
for more information.
About WSWA's SipSource
WSWA's SipSource is the ONLY reliable source for wine and spirits
trends and share based on aggregated distributor depletion data.
Representing more than 60% of wholesale products by volume from
distributors in all 50 states, SipSource data is never shared with
or sold to other data providers. WSWA's SipSource relies on primary
source, verified data directly from America's family-owned wine and
spirits wholesalers. The SipSource data set is built from single
products sold from wine and spirits wholesalers to individual
retail locations and includes hundreds of thousands of outlets. Get
unrivaled channel segmentation and insights covering the largest
number of products and retail outlets of any industry data set ever
compiled.
MEDIA CONTACT
Michael
Bilello
michael@wswa.org | (202) 716-4805
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SOURCE Wine & Spirits Wholesalers of America