Beverage Business Briefing

**Category-Wide Trends** - Spirits overtook beer in U.S. alcohol revenue share for 2025 (42.4% vs. 41.8%) per DISCUS, even as beer still leads on volume - Wine fell below 300 million 9-liter cases for the first time in two decades - Off-premise total beverage alcohol dollars down ~3.1% for the four weeks ending June 27; wine hit hardest, club stores the only channel gaining - RTD/prepared cocktail...

## Market Overview - NIQ off-premise: total bev-alc dollars -3.6% YoY to $8.8B; volume -5.1% to 173.8M cases (4 wks ending 6/20) - Weekly bump +2.9% on World Cup, Juneteenth, early Father's Day - Wine -5.1%/-6.8%; Spirits -5.2%/-4.7%; Beer -3.7%/-4.5% - RTD cocktails the standout: spirits-based RTDs +28%/+28.5%; wine-based RTDs +7.3% - Top RTD growth brands: Cutwater (A-B, +124.5%), Surfside (Stat...

- **Big market question:** TD Cowen challenged the structural-decline narrative, forecasting U.S. supplier gross revenue growth of 1.3% CAGR from 2025 to 2030, with volume stabilization in 2027. - **Current category pressure remains real:** IWSR reported total U.S. beverage alcohol volume down 5% last year; NielsenIQ showed recent total alcohol dollar sales down 4.1%. - **Beer was mixed:** Constel...

* **Global Trade & Tariff Volatility:** A 100% U.S. tariff threat on French wine/Champagne looms over France's 3% Digital Services Tax. Concurrently, the American Whiskey Association is actively lobbying for access to India’s massive emerging consumer class. The interdependency of the global spirits trade was highlighted by John Swinney’s visit to Independent Stave Company's Kentucky Cooperage...

**Key Themes This Week:** - US beverage alcohol market in structural multi-year decline; IWSR projects -18% servings by 2035 - Beer enters summer with negative momentum; Memorial Day disappointing across channels - World Cup represents industry's largest activation bet — Diageo makes history as first spirits sponsor - Wine industry contraction deepens: Treasury Wine Estates slashes portfolio from...

**Distribution Upheaval** - RNDC closes transfer of 11 markets to Reyes Beverage Group; Reyes now covers 52% of US LDA population - Additional RNDC market exits pending: Columbia Distributing (OR/WA), Martignetti (17 control states), Manhattan Beer (NY), Breakthru (KY/IN), Quality Brands (NE/SD/ND) - RNDC layoffs reach up to 4,677 positions across multiple states; NC, SC, OH facilities closing - S...

**Key Themes This Week:** - US beverage alcohol market broadly declining across all categories; consumer sentiment near historic lows - Spirit-based RTDs are the sole clear growth engine within spirits - Non-alcoholic beer continues rapid ascent, led by Athletic Brewing and Go Brewing - Wine faces a six-year structural contraction; DTC shipments resume decline after brief March recovery - Craft be...

**Key Themes:** - Broad US bev-alc contraction deepens: total off-premise sales down 6% in dollars, 7% in volume (4 weeks ending May 9) - Consumer trade-down behavior hits record levels; premium and luxury tiers under acute pressure - Spirits-based RTDs remain sole reliable growth engine but approaching saturation with 750+ brands - RNDC national unwind accelerates with Oregon WARN filings; distri...

**Key Themes This Week:** - **The Great Distribution Reshuffling:** RNDC exits nearly all U.S. territories; Reyes acquires 11 states, Breakthru takes Kentucky and Indiana, Martignetti absorbs 17 control states, Manhattan Beer takes New York wine/spirits rights, Columbia Distributing eyes Oregon/Washington/Alaska, Quality Brands picks up Nebraska and the Dakotas. Southern Glazer's and Johnson Broth...

**Key Themes This Week:** - Legal/regulatory disruption accelerating: Sixth Circuit strikes Ohio shipping law; Supreme Court may take up retail shipping cases May 14 - Tariff relief: 10% Scotch whisky tariff eliminated following King Charles state visit - Beer showing cyclical recovery signs: ABI first volume growth since 2023; March shipments +2.5%; BPI above 50 for second consecutive month - Spi...

**Week of April 27 – May 1, 2026** ### Distribution Upheaval - **RNDC dissolution accelerates**: Columbia Distributing acquires Oregon/Washington/Alaska; Martignetti takes 13 control states + brokerage in 4 more; Reyes Beverage Group closing on 11 states by late May; Manhattan Beer acquires RNDC-Opici NY distribution rights; Great Plains buyer TBD; Illinois JV in flux - **2,774 WARN Act notices**...

**Week of April 20–24, 2026** ### Key Themes - **Federal cannabis rescheduling** from Schedule I to Schedule III — the most significant US cannabis policy shift since state legalization began, with immediate financial implications for multi-state operators (Trulieve, Curaleaf, Verano, Green Thumb Industries) totaling ~$2B in potential 280E tax relief - **Brown-Forman M&A battle** between Sazer...

**Major M&A & Corporate Moves** - Sazerac tables $15B ($32/share) all-cash bid for Brown-Forman; Pernod Ricard pursuing parallel "merger of equals" talks; family governance structure is key differentiator - Mark Anthony Brands acquires The Finnish Long Drink; spirits-based RTD pivot; brand posted +24% dollar and volume growth over trailing 52 weeks - Uncle Nearest insolvent; receiver marke...

**Major M&A & Corporate Moves** - Sazerac formally approaches Brown-Forman, competing with Pernod Ricard's existing merger-of-equals discussions; BF shares surge ~14% - E&J Gallo acquires Four Roses Bourbon from Kirin for up to $775M — pivoting away from declining wine - Molson Coors' Monaco Cocktails acquisition scrutinized as potentially too small to compete with AB InBev's RTD portf...

## SHOW NOTES **Top Stories** - **Pernod Ricard & Brown-Forman confirm merger talks** — potential $31B combined entity; Citi puts deal odds at 50/50; Jefferies projects $450M in synergies; governance and balance sheet challenges remain - **E. & J. Gallo closes $775M Four Roses acquisition** — highest price ever for a Kentucky bourbon distillery; returns brand to US family ownership after 8...

**Week of March 24–28, 2026** **Top Stories:** - **Pernod Ricard & Brown-Forman confirm active merger discussions** — potential "merger of equals" that would create joint #2 US spirits company; estimated $450M in cost synergies; Jefferies, TD Cowen, and ROTH weigh in on strategic logic, valuation, and Brown family governance hurdles - **Uncle Nearest crisis deepens** — receiver seeks gag order...

**Major Themes This Week:** - **Distribution consolidation accelerates:** Reyes Beverage Group expands RNDC acquisition to 10 states plus D.C.; SGWS acquires Clare Rose on Long Island; A-B InBev acquires Advance Beverage in Bakersfield, CA; SGWS faces federal indictment of former executives - **Off-premise sales still declining:** Total alcohol dollars down -2.4% (NIQ 4-week) to -3.4% (TD Cowen 2-...

**Key Themes This Week:** - US alcohol consumption hits record-low 54% of adults; structural demographic shift, not cyclical downturn - Off-premise dollar sales declining across nearly all segments; prepared cocktails and RTDs the sole growth category - Non-alcoholic beer continues double-digit growth but shows early signs of maturation **Major Company Moves:** - **Reyes Beverage Group** expands R...

**Key Themes This Week:** - Structural US alcohol market contraction deepens across spirits, beer, and wine - RTD/Prepared Cocktails surge 30%+ as the only consistent growth category - Southern Glazer's federal bribery indictment sends shockwaves through distribution - Diageo abandons premiumization playbook; cuts hospitality team and dividend - Tequila growth story stalls: Casamigos -24%, Jose Cu...

**Key Themes This Week:** - US bev-alc market showing tentative recovery; January 2026 comps turned positive for first time in over a year - RTD cocktails dominate growth: spirits-based RTDs +39.4%, wine-based RTDs +23.7% - Premium spirits correction deepening: Diageo US sales -6.8%, MGP brown goods -52% - Generational consumption shift accelerating; binge drinking among 21-34 year olds down ~3.9...

**Key Themes This Week:** - Broad-based U.S. volume declines across beer (-5.9% full-year shipments), spirits (-7% value), and wine (DTC -14% volume in OR/WA) - Distribution tier structural contraction: Breakthru cuts ~500 jobs; RNDC shed 1,700+ in past year; Reyes in active talks for further consolidation - RTD cocktails as the dominant growth engine: +7.1% dollar sales (NIQ), +35.2% value growth...

## SHOW NOTES **Key Leadership & Corporate News** - Constellation Brands CEO transition: Nicholas Fink succeeds Bill Newlands effective April 13, 2026 - Heineken announces 5,000-6,000 job cuts (7% of workforce) over two years; targets €400-500M annual savings - AB InBev FY25 EBITDA at $21.2B; guides FY26 organic growth of 4-8% - Coca-Cola consolidates Red Tree Beverages and BodyArmor under Nor...

### Key Themes This Week: - **RTD Revolution**: Ready-to-drink cocktails drove +17.1% volume growth; spirits excluding RTDs were -2.7% volume - **Historic Milestone**: Spirits overtook beer in U.S. revenue share (42.4% vs 41.8-41.9%) - **Consumer Caution**: Affordability-first behavior intensifying; Hispanic consumer concern affecting on-premise traffic - **Wine's Structural Reset**: Participation...

## SHOW NOTES ### Key Themes This Week: - **U.S. demand showing modest improvement** but still negative; off-premise total alcohol -1.2% (improved from -3.4%) - **RTD/Prepared Cocktails remain the clear winner** at +7.4% dollar growth - **Wine DTC in structural decline**: -15% volume, -$230M value, average bottle price up 11% to $56.78 - **Distribution disruption accelerating**: RNDC losing major...

- **Theme of the week:** Stabilizing demand signals, but rising execution risk—driven by value-conscious consumers and major distribution disruption. - **Wholesaler signal:** NBWA’s January Beer Purchasers’ Index rebounded sharply vs. December, with **below-premium** reaching an expansion threshold—though overall conditions remain cautious. - **Beer pricing reality:** Industry leaders say the era...