Top Wholesalers Projecting Solid Growth Despite Tough Market

After a tumultuous few years in the drinks business, talk within the industry is largely revolving around “normalizing” conditions this year, with the on- and off-premise markets returning to relative equilibrium and the heady growth rates of the previous few years moderating in recent months. Supply chain challenges and product shortages also appear to be easing, allowing key brands to keep building momentum without supply constraints.

Within the wholesale tier, the top players are largely bullish on growth looking ahead, despite general macroeconomic uncertainty and more specific challenges like staffing in the on-premise and declining volume at the lower end of the wine category. Overall, the U.S. market’s wholesale tier is expected to total nearly $74 billion in revenue this year, according to Impact Databank, representing a 5.4% increase compared with 2022.

At the individual level, wholesalers surveyed by Impact are mostly projecting solid revenue increases this year, as their sales teams refocus on in-person selling and customer education after the years-long pandemic interruption.

Several of those leading distributors are targeting new revenue milestones this year, including top-ranked Southern Glazer’s at $25.2 billion, third-ranked Breakthru Beverage at $8.2 billion, and fourth-ranked Johnson Brothers at $3.2 billion. Continued gains for North American whisk(e)y—and especially strong demand in the upscale Tequila and ready-to-drink cocktail categories—is expected to propel much of that growth.

“The lower end of the wine category continues to be a little bit soft, but the higher end continues to do well,” observes Breakthru president and CEO Tom Bené. “In spirits, the spirit-based ready-to-drink products are certainly taking share from other areas.”

“We’re still projecting some nice overall growth,” says Wayne Chaplin, CEO at distribution market leader Southern Glazer’s. “A lot of it is being driven by the premium and super-premium segment in spirits. In the on-premise, we’re seeing growth over the prior year.”

“We see premiumization as a longer-term megatrend for beverage alcohol,” adds RNDC president and CEO Nick Mehall. “There’s continued strength specifically within the Tequila and Bourbon spaces and we’re excited to position our portfolio for future growth in these areas. RTDs continue to be strong, but competition in that space is growing. Despite the recent broad trends in wine, we continue to believe in the strength of the wine category. It’s important to recruit the next generation of wine consumers.”

Impact has a full report on the leading wholesaler players in the U.S. market in its April 1&15 issue. Click here to subscribe.—Daniel Marsteller

Tagged : Breakthru, Johnson Brothers, RNDC, Southern Glazer's

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