Top Wholesalers: Consumers Resilient But Cautious This Holiday Season

The leading wholesalers in the U.S. market are cautiously optimistic as we get deeper into the holiday season, as consumers continue to show resilience even as they become more selective in their drinks choices.

“Overall, the consumer has been relatively resilient all things considered,” Zach Poelma, SVP supplier strategy & insights at Southern Glazer’s, tells SND. “We’re not seeing significant trading down to the value-priced tiers. What we are seeing, though, is some signs of de-premiumization driven by consumption frequency slowing across some of the highest price tiers, and an uptick in spirits in the $25-$35 range and wine in the $10-$20 range.”

“You can expect consumers to trade up for the holidays, but they will remain cautious with their spending,” adds Jenn Engel, chief commercial sales officer at RNDC. “If our expectations mirror last holiday, we can expect 27% of spirits share to be in the over $25 range and 15% of table wine in the over $15 range for the last three months of the year. According to NIQ, 84% of consumers are expected to spend the same as last year on holidays and special occasions.”

“Consumers are shopping trusted brands,” explains Kevin Roberts, chief commercial officer at Breakthru. “We see a slight shift out of the apex end of the price tier, even within hot categories like Tequila and sparkling. While the consumer remains resilient and is sticking with higher-end products, behaviors have normalized. The same can be said for wine consumers, with share gains in premium-plus price tiers and share declines in the lower end.” Specifically, Roberts says there’s been some softening in the $50-plus price tier of sparkling wine, but “the $30-$50 range remains vibrant.”

Poelma agrees. “When it comes to sparkling wine and Champagne, we continue to see share losses in the greater than $50 price tier to lower-priced sparkling options like Prosecco,” he says. “This is consistent across the on-premise as well. The $15-$20 sparkling price tier, which is primarily made up of Prosecco, gained two points of share within the overall sparkling category over the last three months, and we expect this to continue through the holiday season.”

In spirits, Tequila in the $25-$35 range is up high single digits, outpacing the overall category. That price range includes labels like 1800, Espolon, Teremana, Cazadores, and Milagro. A similar effect is evident in vodka, with the premium tier outperforming super-premiums as well as the mid-priced and value tiers. “We believe that when consumers have to make a decision due to pressure on their wallet, they are sacrificing quantity over quality and still choosing to drink better, and a great example of this would be the Tequilas that are 100% agave that are still putting up robust growth,” Poelma notes.

That’s true in the on-premise as well, Roberts says. “All price tiers have softened throughout 2023, and ultra-plus has softened faster than lower-priced tiers in some categories,” he observes. “But still, the ultra-plus volume decline is -12% for whiskey, while the value tier is off -24% in the latest 12-week CGA data. And ultra-plus Tequila is only off -3% while value Tequila is off -18%.”

Despite increased caution among consumers, the holiday shopping season kicked off strong over the Thanksgiving weekend, Engel notes, with overall consumer spending up 7.5%. “While continued price taking is negatively impacting volume trends in bev alc overall, we’re hopeful that the Black Friday spending continues as long as holiday discounts are available to shoppers,” she says, adding that supplier efforts to leverage special offerings are helping to boost interest. “Anniversary editions and specialty gift packs are bright spots even in challenged segments such as Cognac.”—Daniel Marsteller

Tagged : Breakthru, RNDC, Southern Glazer's

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