Leading Distributors Set The Table For 2024

With 2023 drawing to a close, the drinks industry is gearing up for the new year. Questions around the strength of the consumer environment continue to impact the forecasts of leading players, with the top distributors in the U.S. telling SND that growth is likely to be hard-earned again in 2024, albeit with some improvement over this year in certain areas of the market.

“We’re anticipating moderate growth, stemming from Tequila, RTDs, and premiumization, where consumer preference for spirits is growing,” says Kevin Roberts, chief commercial officer at Breakthru. “In the wine category, 2024 is looking like trends will improve but still be challenged, and we expect slight growth to be driven by Prosecco and Sauvignon Blanc. Our portfolio is well positioned, and we’ll remain nimble to respond to consumer trends.”

At Southern Glazer’s, SVP supplier strategy & insights Zach Poelma expects “another challenging year for growth, particularly in the first half of the year given all the uncertainty with the consumer. The overall wine business is not showing any signs of reversing the multi-year decline, although we do see opportunities for growth in the $10-$20 price tier.”

In spirits, Poelma says “flattish growth is likely in 2024 as depletion growth starts to more closely track consumer takeaway, which it lagged for most of 2023. Overall value growth we think falls somewhere in the range of 2%-3% ahead of volume growth, as mix pressures remain particularly in H1 and promotional levels likely tick up from what we saw in 2022 and 2023.”

Those forecasts come as consumers appear to have shifted to the premium segment in both wine and spirits, with some softening happening at both the top and lower levels of the market. “Growth is really coming in that mid-priced tier and premium tier, which combined gained about 1 point of share over the last year and 1.4 points over the last 3 months in the off-premise,” says Poelma.

To stoke consumer enthusiasm in the coming months, RNDC is looking to leverage current trends. “Consumers are still experience-driven both in the discovery of new brands and spirits infused with flavors such as Pumpkin Spice, Salted Caramel, and Pineapple, which attract consumers who are curious and adventure-seeking,” notes Jenn Engel, chief commercial sales officer. “We expect mainstream trends to continue, such as no- and low-alcohol, flavors, and a continued focus on food and drink transparency such as better-for-you claims.”

Ultimately, says Roberts, kitchen table economics will dictate how the year plays out. “Datassential has bearishly forecasted that 2024 total restaurant ‘total F&B’ will be flat to down (-0.3%), with lodging up slightly (+2.2%), along with the transportation channel (+0.7%),” he points out. “That being said, we believe that on-premise bev alc will fare better if the value proposition is right for the consumer, since they still want those experiences they can’t create at home.” Breakthru, he says, is focused on driving new ideas for cocktails and menu items and educating on-premise staff to make the most of those opportunities.—Daniel Marsteller

Tagged : Breakthru, RNDC, Southern Glazer's

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