Southern Glazer’s Outlook On 2025
January 6, 2025The top wine and spirits wholesaler nationwide with estimated 2024 revenues of $26 billion, Southern Glazer’s has a unique window into drinks trends across the U.S. market. While both on- and off-premise customers continued to order cautiously leading into the last days of 2025, the company tells SND that bright spots are apparent in certain areas of the market.
“SipSource depletion trends have showed a challenging market overall right now with declines stabilizing but not really improving through H1 of 2025,” says Zach Poelma, Southern Glazer’s senior vice president of supplier strategy and insights. “While we’re seeing our business outperform SipSource and grow share in most segments and channels recently, we are seeing some of the same softness in our business that they highlighted.”
However, among the bright spots heading into the new year are “premium-priced Tequilas and Reposados across all price tiers, along with whiskies,” says Poelma. “On the wine side we continue to see more affordable mid-priced sparkling wines, and wine between $10 and $20 driven by Sauvignon Blanc, continue to present opportunities. We also continue to see our RTD business grow both on- and off-premise.” In the off-premise, spirits are outperforming wine by seven points across Southern Glazer’s business, although the gap is only about half that on-premise.
Overall, Poelma notes that the retail side has fared better than the on-premise lately, “driven by our national and regional chains, which are outperforming our independent liquor channel. Some of our datapoints indicate within the chains that the destocking we have seen play out over the last 18 months may finally be easing a bit as we progress through Q1 of 2025.”
Consumers are aggressively seeking out value in the on-premise market, says Poelma. “Foot traffic declines and a more cost-conscious consumer are putting some challenges on the channel overall. Most of our casual dining customers are performing stronger than the fine dining segment currently, where we have seen challenges dating back to the beginning of last year.”
Among other trends the wholesale giant is watching, different bottle sizes are increasingly coming into play. “We are seeing positive growth trends in the 375-ml. business,” Poelma notes. “Some consumers that had traded up to higher-priced products during the pandemic don’t necessarily want to trade back down, but don’t have as much discretionary income to spend. So they grab a 375-ml., which lets them drink the same product, but at a lower overall cost. We are also seeing 1.75-liter sizes outperform.”
Additionally, Southern Glazer’s continues to lean into the convenience-store channel, which has grown more important with the surge in RTDs. “We’ve doubled-down on this channel in key markets by increasing both our merchandising and delivery frequencies to better service our larger RTD portfolio,” says Poelma. “Our business in the c-stores is outpacing the balance of the house by nearly 4%. Between the strong set of brands we already have in this space, innovation in the RTD segment from some key strategic supplier partners, plus some new brands we’ve recently brought onboard, we’re already seeing strong early results from our expanded investment.” —Daniel Marsteller
Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.Tagged : Southern Glazer's
