Breakthru Weighs In On Early Holiday Season Trends

The third-largest wine and spirits distributor in the U.S. market with projected 2024 revenues of $8.7 billion, according to Shanken’s Impact Newsletter, Breakthru Beverage Group operates across 16 markets covering a wide swath of the U.S. SND executive editor Daniel Marsteller caught up with Michelle Weaver, Breakthru’s senior director, commercial analytics & insights, to get the latest on conditions across the wholesaler’s footprint as the holiday selling season heats up.

SND: How are overall conditions as we get deeper into the holiday season? What trends are encouraging, and what gives cause for concern?

Weaver: Consumers are being more cautious with their dollars this holiday season and we’ve seen some signs of flat or declining volume. That being said, they are being more selective and trading up when they do go out, indulging more with a nice bottle of wine or a higher-end cocktail.

We believe part of what’s driving this is that consumer preferences continue to shift toward more moderated alcohol consumption. When you look at the full range of consumer occasions, you can’t leave out the importance of low- and no-alcohol options. We’ve long worked to position ourselves to be adaptable to consumer behavior and believe we have the right portfolio to ensure our customers have what they need. Overall, we’re optimistic for the holiday season.

SND: Which price and product segments do you have your eye on as potential growth opportunities?

Weaver: We’re still seeing some encouraging signs and expect sparkling wine to continue to grow through the end of the year. Similarly, there are a lot of exciting things happening in the RTD space.

We continue to lean into growth opportunities in Tequila and white wine between $11-$25 and are keeping a close eye on cordials and gin priced $50-$100, as we see positive momentum in that space. From a broader perspective, premiumization seems to be stabilizing, with positive momentum remaining in ultra-premium spirits and super-luxury and icon wine.

SND: How is the on-premise faring so far?

Weaver: It all starts with the consumer. Economic reports are showing inflation for meals out is four times more than food at home, and consumer concerns over that are very evident. They have a strong sensitivity to prices in the on-premise, even among high-income households.

To that end, on-premise accounts still lag behind pre-pandemic levels and there is a significant percentage of consumers who currently work from home who are expected to return to the office in 2025. This may help with continued recovery in the on-premise. Also, on-premise accounts are becoming more digitally savvy in tougher times. Over 15% of our on-premise sales come from B2B channels, mostly coming from Breakthru Now.

SND: How about the retail segment?

Weaver: In the retail space, trends show an overall decline, but penetration continues to increase. Seeing this, we’ve prioritized our consumer targeting. RTDs are particularly important in retail, as RTDs and wine and spirit cocktails continue to show double-digit growth. Premium price points make up the bulk of RTD dollar sales, and that’s what we see driving growth. More specifically, spirits-based cocktails lead the category on all consumer metrics.

SND: How is the long-term premiumization trend in wine and spirits holding up?

Weaver: We remain optimistic that consumers will continue to drive the premiumization trend and we’ve seen growth in this space, especially in the wine category and with spirits like Tequila. Our Aspect luxury wine portfolio as an example has allowed us to reengage with our customers in retail to educate, train, and help them tell brand stories to encourage consumers to trade up.

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