Top U.S. Distributors Projecting Growth Despite Challenging Conditions

It’s been a challenging period in the drinks business over the past year, as uneven economic conditions, retailer destocking, lingering inflation, and slower uptake by younger consumers—particularly in wine—have combined to impact the industry. But amid the clouds, the leading spirits and wine distributors in the U.S. market are mostly projecting solid growth this year, as they focus on key categories like Tequila, whiskey, RTDs, and wines in the $15-$25 price band.

Overall, wholesale wine and spirits revenues in the U.S. are projected to increase 1.6% to $72.1 billion in 2024. But the top 10 distributors are expecting to outpace their smaller competitors, racking up a total of $58.7 billion in revenue on a 3.3% increase, to account for 81.5% of the market. Considering that combined wine and spirits volume in the U.S. market declined last year for the first time since 1993, according to Impact Databank, and is projected to do so again this year (with value continuing to eke out gains), wholesalers’ growth forecasts in fact appear relatively bullish, given the conditions.

“The first quarter’s been challenging, but we’ve seen some bright spots around certain categories, such as American whiskey and Tequila, especially at certain price points, and in wine between $15 and $25,” says Wayne Chaplin, CEO of top-ranked distributor Southern Glazer’s. “We’re still cycling some pretty good-sized business from prior years. And we’re also seeing retailers continue to reduce in-store inventory, size of displays, backroom stock, and that continues to result in depletion results softer than consumer takeaway figures. On-premise is faring a bit better, especially in fast casual and high-end dining and resorts. But it’s not enough to offset what we’re seeing in the off-premise channel.”

Southern Glazer’s revenues are projected to reach $26 billion on 3.2% growth in 2024, accounting for a 36% share of the market. Other key players are also projecting revenue gains this year, with second-ranked RNDC expecting sales of $12.2 billion, third-ranked Breakthru Beverage Group closing in on $8.7 billion, and fourth-ranked Johnson Brothers Liquor Company approaching $3.3 billion. Each of the top 10 distributors expects to grow in 2024.

“Everyone is saying we’re facing this incredible headwind right now,” says Breakthru co-chairman Charlie Merinoff. “And one of the reasons I think we feel that is we had two years of Covid where consumption just went crazy. Now it’s a period of normalization and even the pendulum swinging backwards a little bit. It’s a bit more challenging, and drinking habits are changing.”

“I think there’s a lot of noise in the numbers,” explains RNDC president and CEO Nick Mehall. “We’re still in a period of premiumization, but we’re seeing some of those high-end trends start to cool off. We’re seeing some retailers right-sizing inventory levels and changing how their footprints look, which impacts trends. The conversations have shifted into: how do I grow market share, how do I outperform the marketplace?”

A full report on the U.S. market’s wine and spirits wholesale tier appears in the April 1&15 issue of Shanken’s Impact Newsletter. Click here to subscribe.—Daniel Marsteller

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

GET YOUR FIRST LOOK AT 2025 ESTIMATES AND 2030 PROJECTIONS FOR THE WINE AND SPIRITS INDUSTRIES. ORDER YOUR 2025 IMPACT DATABANK REPORTS. CLICK HERE.