Wine & Spirits Wholesalers of America’s (WSWA’s) SipSource, a source for U.S. wine and spirits marketplace performance fueled by WSWA, just released its Q2 2024 Report, which highlights key trends and statistics for both wine and spirits categories.
Tracking data over a 12-month period (July 2023-June 2024), the report introduces the Accounts Sold and Points of Distribution metrics enhancement, which count unique sales rather than total physical volume, according to SipSource. 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, SipSource states.
Tequila Reposado continues to dominate the spirits segment with impressive growth. The liquor is up +10.7%, showcasing resilience in premiumization, with products over $50 increasing by +25.0% and representing 32.8% of volume, according to SipSource. 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 in a news release. “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, according to SipSource.
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, SipSource states.
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 in the release. “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%, SipSource states. 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, according to SipSource. 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%.
