Beverage Alcohol 2024, A Few Bright Spots, But Mostly Headwinds

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There is much commentary in beverage alcohol trade publications on the trends in the US beverage alcohol market in 2024. Much of the news is negative. BW166 has just issued the Total Beverage Alcohol Overview for December 2024 with a special addendum. The report tracks 100% of the total beverage alcohol entering the US market based on TTB, customs, and other government sources. Different data sources portray their information as a view of the total US market but often only account for about 50% to 60% of the total market.

The reality is that 2024 was a rough year, but there are some bright spots. Looking across the market at Beverage Alcohol and Economic trends, the following highlights some of the key metrics.

Consumers increased spending on Beverage Alcohol to $408.8 billion (+3.2%) across both off-premise and on-premise channels. The data is sourced from the Bureau of Economic Analysis (BEA), which reports on significant economic data such as GDP and Personal Consumption Expenditures (PCE), which account for over two-thirds of GDP. The BEA data demonstrates the premiumization of Beverage Alcohol growing from 1.80% of PCE to 1.96% of PCE over the past decade. This is a material shift, but it is interesting to note that in 1960 spending on Beverage Alcohol accounted for 3.44% of PCE.

The BEA relies on survey data from the Census Data, which performs an economic census of businesses across the US every five years. They supplement this with monthly surveys of various Key channels. Trends for all consumer spending in channels important to the Beverage Alcohol industry in 2024 were:

  • Supermarkets and Grocery Stores – $853,8 billion (+0.9%)
  • Warehouse Clubs and Supercenters – $667.2 billion (+5.0%)
  • Beer, Wine, and Liquor Stores – $73.8 billion (+2.4%)
  • Full-Service Restaurants & Drinking Places – $566 billion (+5.3%)

Sales of Beer, Wine, and Spirits Wholesalers totaled $185.3 billion, -1.0%. Many sources have reported increased inventories at wholesalers compared to pre-pandemic levels. BW166 estimates that the carrying cost for inventories has tripled over the past five years due to higher inventory levels and interest rates. The carrying cost has increased from 5% of operating profits to 16% over this period.

All Wine shipped into the US in 2024 totaled 362 million 9L cases, a decline of 4.2%. Domestic bottled products were down 8.7%, while imports were up +6.6%. A bright spot in the Wine market were flavored Wine Beverages, +28%. Imported Sparkling wines and Imported Still Wines were also bright spots, +7.5% and +2.2%, respectively.

Beer and cider shipments into the US totaled 2.62 billion cases (2.25gals), a decline of -1.8%. Domestic Beer drove the decline, with a decline of -3.5%. Imported beer was another bright spot, with volumes of 579 million cases, +4.8%. Cider declined from 19 million cases to 18 million.

Spirits shipments into the US totaled 307 million cases, an increase of 5.7%. The key driver of growth was RTDs packaged in the US. The TTB reporting included RTDs in both Cordial and Cocktail segments. These two segments for products packaged in the US totaled 115 million 9L cases, +21.1%. This was an increase of 20 million cases in 2024 versus a growth of 26 million cases in 2023. Excluding these two segments, all other spirits packaged in the US totals 110 9L cases, a decline of -3.3%. Packaged imports totaled 82 million 9L cases, which was basically flat compared to 2023. A bright spot for imports was 29 million cases of Tequila, a growth of +5.3% versus 2023.

BW166 has an index of total servings of beverage alcohol entering the market. A serving is 12 ounces of Beer, 5 ounces of Wine, 12 ounces of Flavored Wine Beverages, 1 ½ ounces of traditional Spirits, 3 ounces of Cordials, and 6 ounces of cocktails. The calculation may slightly overstate the total servings given the growth of Spirits RTDs at 6% to 8% alcohol content. The index is based on 2003 = 100. At the end of 2024, the index stood at 118.04, a decline of -1.10% from 2023.

BW166 also has an index of servings per legal drinking-age adult. The base is also 2003 = 100. At the end of 2024, the index stood at 93.5, a decline of 1.98% from 2023 and a 6.5% reduction from the average between 1995 and 2022.

These two indices demonstrate a decline in the volume of beverage alcohol in the US market, although, as noted at the beginning of this post, consumers continue to increase their spending. Unfortunately, some recent Gallup survey data support the reduction in the market.

  • Gallup reports that over the past two years, the percentage of adults who believe that moderate consumption of alcohol is not healthy has increased from 30% to 45%. This is driven by people under 30.

In addition to consumer attitudes toward beverage alcohol, the category has become more expensive. Over the past 30 years, average annual pay has been up 127%. The Off-Premise cost of Beverage alcohol per serving has increased by 200%, and the on-premise cost of beverage alcohol per serving has increased by over 300% during this same period.

The attitudes of younger consumers, coupled with the elevated costs, do not bode well for a broader adoption of Beverage Alcohol, especially with younger consumers. Couple these points with the pressure put on alcohol with claims of cancer risk, and the industry has some strong headwinds to deal with. The industry needs to address how to change perceptions and consider how to make products more affordable for younger consumers while contemplating the risk of class action lawsuits.

The industry has not faced these types of challenges since the 1980s. The solutions are more complicated today.

Beer, Spirits, & Wine – Packaged Imports Decline -8% By Value L12M through March 2024, Packaged Exports Decline -6%

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Total Beverage Alcohol:

  • Total beverage alcohol imports (including bulk and packaged) declined -8% by value over the last twelve months and grew +2% by value over the last three months. 43% of all imported beverage alcohol by value came from Mexico over the last twelve months.

  • Total beverage alcohol exports (included bulk and packaged) declined -6% by value over the last twelve months and grew +4% by value over the last three months. 30% of all exported beverage alcohol by value went to Canada over the last twelve months.

Each of the bw166 Import and Export Reports (for Beer, Spirits, and Wine) enable tracking Beverage Alcohol imports and exports on a monthly basis for volume, value in USD, and value in local currency for all major trading countries.

Beer:

  • Imported beer stayed flat by volume and grew +3% by value over the last twelve months. Over the last three months, imports grew +5% by volume and grew +10% by value. 83% of imported beer by value comes from Mexico.
  • Exported beer declined -38% by volume and declined -26% by value over the last twelve months. Over the last three months, exports declined -19% by volume and declined -6% by value. 19% of exported beer by value goes to Honduras.

For more details regarding imported and exported beer across all countries, subscribe to the bw166 Beer – Imports and Exports report.

Spirits:

  • Imported packaged spirits for the last twelve months declined -14% by volume and declined -11% by value. Over the last three months, volumes declined -1% and grew +1% by value.
  • Imported bulk spirits for the last twelve months declined -13% by volume and declined -13% by value. Over the last three months, volumes declined -12% and grew +22% by value.
  • 45% of all imported packaged spirits by value arrived from Mexico while 29% of all imported bulk spirits by value arrived from Brazil.
  • Exported packaged spirits for the last twelve months grew +5% by volume and grew +4% by value. Over the last three months, volumes grew +28% and grew +45% by value.
  • Exported bulk spirits for the last twelve months declined -6% by volume and declined -5% by value. Over the last three months, volumes declined -8% and declined -11% by value.
  • 13% of all exported packaged spirits by value is destined for Canada while 38% of all exported bulk spirits by value is destined for Canada.

For more details regarding imported and exported spirits including detailed category breakdowns across all countries, subscribe to the bw166 Spirits – Imports and Exports report.

Wine:

  • Imported packaged wine for the last twelve months declined -19% by volume and declined -12% by value. Over the last three months, volumes declined -2% and declined -7% by value.
  • Imported bulk wine for the last twelve months declined -16% by volume and declined -23% by value. Over the last three months, volumes grew +6% and grew +21% by value.
  • 37% of all imported packaged wine by value arrived from France while 35% of all imported bulk wine by value arrived from New Zealand.
  • Exported packaged wine for the last twelve months declined -22% by volume and declined -12% by value. Over the last three months, volumes declined -4% and grew +9% by value.
  • Exported bulk wine for the last twelve months declined -35% by volume and declined -29% by value. Over the last three months, volumes declined -14% and declined -1% by value.
  • 36% of all exported packaged wine by value is destined for Canada, while 61% of all exported bulk wine by value is destined for the United Kingdom.

For more details regarding imported and exported wine, including detailed category breakdowns across all countries, subscribe to the bw166 Wine – Imports and Exports report.

TTB Approved 175K Products L12M through March 2024, A Decrease of -2.1K (–1.2%)

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By Category:

  • Beer: 38.6K products approved over the L12M (–7.1% vs. last year) and 10K over the L3M (–9.4% vs. last year)
  • Spirits: 22.8K products approved over the L12M (–2.4% vs. last year) and 4.9K over the L3M (–11.2% vs. last year)
  • Wine: 113.6K products approved over the L12M (+1.3% vs. last year) and 27.5K over the L3M (–9.7% vs. last year)

By Origin:

  • Domestic: 89K products approved over the L12M (–5.1% vs. last year) and 23.4K over the L3M (–8.4% vs. last year)
  • Imports: 85.9K products approved over the L12M (+3.3% vs. last year) and 19K over the L3M (–11.5% vs. last year)

For more information regarding Product Approvals including detailed category breakdowns and origin information (State for Domestic products and Country for Imported products), subscribe to the bw166 Product Approvals Report or visit our website at www.bw166.com.

Beer, Spirits, & Wine – Packaged Imports Decline -8% By Value L12M through February 2024, Packaged Exports Decline -10%

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Total Beverage Alcohol:

  • Total beverage alcohol imports (including bulk and packaged) declined -8% by value over the last twelve months and grew +2% by value over the last three months. 43% of all imported beverage alcohol by value came from Mexico over the last twelve months.

  • Total beverage alcohol exports (included bulk and packaged) declined -6% by value over the last twelve months and grew +1% by value over the last three months. 31% of all exported beverage alcohol by value went to Canada over the last twelve months.

Each of the bw166 Import and Export Reports (for Beer, Spirits, and Wine) enables tracking Beverage Alcohol imports and exports every month for volume, value in USD, and value in local currency for all major trading countries.

Beer:

  • Imported beer grew +1% by volume and grew +4% by value over the last twelve months. Over the last three months, imports grew +7% by volume and grew +12% by value. 83% of imported beer by value comes from Mexico.
  • Exported beer declined -40% by volume and declined -29% by value over the last twelve months. Over the last three months, exports declined -19% by volume and declined -6% by value. 19% of exported beer by value goes to Honduras.

For more details regarding imported and exported beer across all countries, subscribe to the bw166 Beer – Imports and Exports report.

Spirits:

  • Imported packaged spirits for the last twelve months declined -14% by volume and declined -12% by value. Over the last three months, volumes declined -2% and grew +0% by value.
  • Imported bulk spirits for the last twelve months declined -15% by volume and declined -15% by value. Over the last three months, volumes grew +6% and grew +26% by value.
  • 45% of all imported packaged spirits by value arrived from Mexico while 30% of all imported bulk spirits by value arrived from Mexico.
  • Exported packaged spirits for the last twelve months grew +4% by volume and declined -1% by value. Over the last three months, volumes grew +14% and grew +13% by value.
  • Exported bulk spirits for the last twelve months declined -11% by volume and declined -2% by value. Over the last three months, volumes declined -23% and declined -4% by value.
  • 14% of all exported packaged spirits by value are destined for Canada while 39% of all exported bulk spirits by value are destined for Canada.

For more details regarding imported and exported spirits including detailed category breakdowns across all countries, subscribe to the bw166 Spirits – Imports and Exports report.

Wine:

  • Imported packaged wine for the last twelve months declined -20% by volume and declined -12% by value. Over the last three months, volumes declined -9% and declined -7% by value.
  • Imported bulk wine for the last twelve months declined -17% by volume and declined -27% by value. Over the last three months, volumes declined -18% and declined -26% by value.
  • 37% of all imported packaged wine by value arrived from France while 32% of all imported bulk wine by value arrived from New Zealand.
  • Exported packaged wine for the last twelve months declined -26% by volume and declined -16% by value. Over the last three months, volumes declined -15% and grew +10% by value.
  • Exported bulk wine for the last twelve months declined -41% by volume and declined -35% by value. Over the last three months, volumes declined -2% and grew +12% by value.
  • 37% of all exported packaged wine by value is destined for Canada while 58% of all exported bulk wine by value is destined for the United Kingdom.

For more details regarding imported and exported wine including detailed category breakdowns across all countries, subscribe to the bw166 Wine – Imports and Exports report.

TTB Approved 179.2K Products L12M through February 2024, An Increase of 2.4K (+1.3%)

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By Category:

  • Beer: 39.4K products approved over the L12M (–5.8% vs. last year) and 9.2K over the L3M (–8.8% vs. last year)
  • Spirits: 23.3K products approved over the L12M (+0.6% vs. last year) and 4.9K over the L3M (–1.6% vs. last year)
  • Wine: 116.4K products approved over the L12M (+4.2% vs. last year) and 24.1K over the L3M (–5.4% vs. last year)

By Origin:

  • Domestic: 91.1K products approved over the L12M (–2.9% vs. last year) and 21.4K over the L3M (–5.4% vs. last year)
  • Imports: 88.1K products approved over the L12M (+6.2% vs. last year) and 16.8K over the L3M (–6.3% vs. last year)

For more information regarding Product Approvals including detailed category breakdowns and origin information (State for Domestic products and Country for Imported products), subscribe to the bw166 Product Approvals Report or visit our website at www.bw166.com.