Last week, Wine & Spirits Wholesalers of America’s (WSWA) SipSource released its Q4 2024 Industry Report, providing an analysis of 2024 year-ending market trends, disruptive category growth and projections for 2025. The report highlights the evolving landscape of the wine and spirits sector amid economic pressures and shifting consumer preferences.
Consumer behaviors drive change
The beverage alcohol industry encountered one of its most challenging years in collective memory, according to SipSource, with all three categories experiencing volume declines. Spirits depletions fell -3.7% and wine fell -7.2% in December-ending data. Unlike previous cycles where volume shifted between categories, the overall decline signals a broader challenge facing the industry – changing consumer behaviors trending away from alcohol consumption.
“Shifting lifestyle choices – including the rise of moderation and abstinence trends – are reshaping consumption patterns. Additionally, the industry is facing competition from alternative adult beverages like energy drinks, botanical-infused drinks, and hemp-derived products, which are increasingly winning traditional alcohol consumption occasions,” said SipSource analyst and industry veteran Dale Stratton in a news release.
Moreover, unlike in recent years, revenue trends also followed a downward trajectory, with spirits revenue declining -4.3% and wine revenue falling -6.3% in 2024. Consumers are not trading up as they consume less – the premiumization trend is all but dead with the exception of a few categories, according to SipSource. Another key factor driving this downturn is the rapid rise in popularity of spirits-based premixed cocktails, which while contributing to growth in their segment, disrupted traditional distribution channels and impacted the revenue of conventional spirits.
Premixed spirits-based cocktails dominate
One of the most striking findings in the report is the continued expansion of the spirit-based premixed cocktail category, according to SipSource, which now represents 14.2% of the total spirits market, up from just 3.2% five years ago. Spirits-based pre-mixed cocktails grew by +3.4% in volume and +3.5% in revenue in 2024, with convenience stores emerging as the fastest-growing retail channel (+14.1% volume, +12.4% revenue). Notably, canned formats dominate the category, accounting for 79.8% of total volume, growing +5.6% in volume and +6.4% in revenue in December-ending data.
Independent data from NIQ Scan further indicates that sales of these products in off-premise channels grew +20.5% in volume and +19.5% in dollars, while convenience store sales surged +31.0% in volume and +29.9% in revenue.
“The rise of premixed cocktails has completely reshaped the supply chain, with many producers opting to distribute these products through beer networks rather than traditional wine and spirits channels. The success of leading brands and variety packs underscores consumer demand for convenience, flavor variety, and experiential drinking occasions,” said Stratton in the release.
Channel expansion and market adjustments
Interestingly, despite overall industry declines, SipSource reveals a +0.7% expansion in total accounts selling wine and spirits in 2024, largely driven by the growth of spirit-based premixed cocktails. Convenience stores were the primary growth engine, increasing by +28.1% in Accounts Sold, or the distinct outlets with beverage alcohol sales within the United States.
Additionally, the on-premise segment demonstrated resilience, according to SipSource, with total volume growth of +7.5%—more than 2.5 times the off-premise growth rate of +2.8%. This shift reflects a growing trend of consumer experimentation, portability and convenience. As a result, future category expansions are expected to resemble the trajectory of premixed cocktails rather than traditional spirits and wine.
Looking ahead to 2025
Despite the headwinds of 2024, SipSource projects that if everything stays the same, 2025 could be a year of stabilization in negative territory, with minimal fluctuation expected across major categories. Industry leaders are emphasizing the need for focus, creativity, collaboration and responsibility to drive potential future growth.
“While the challenges of 2024 have tested the resilience of our industry, we remain optimistic about the future, but not all market conditions will be within our control,” said Stratton in the release. “Stabilization in 2025 will pave the way for renewed momentum in 2026 as we adapt to shifting consumer demands and evolving market dynamics.”
