WSWA’s SipSource Releases Q2 2024 Report, U.S. Wine and Spirits Marketplace Analysis

Aug 08, 2024

Washington, D.C.

Consumers Impacted by Rising Costs; SipSource Subscribers "Not Surprised" by Market Conditions and Major Spirits Companies' Earnings Reports

WASHINGTON, D.C., 08/08/2024 - 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 ([email protected]) 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.

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