Beverage Business Briefing

- **Market pulse:** Total alcohol dollars down 2.4 percent to 8.1B and volume down 4.5 percent to 156.9M cases (NIQ, four weeks ending Oct 10). Prepared cocktails were the only segment up in dollars (plus 1.7 percent). Beer was down 3.4 percent, wine down 3.2 percent, spirits down 2.1 percent. - **Spirits:** Pernod Q1 organic sales down 0.9 percent to ?2.23B (US down 10 percent, China down 25 perc...

- **Spirits near a floor:** Pernod Ricard Q1 FY27 sales were ?2.234B, with US down 10% on destocking. Jameson, Kahlúa, Skrewball and Malibu were bright spots. India grew 19% on pipeline fill ahead of a possible IPO. - **Brown-Forman:** US is about 42% of sales. Gross margin of 60.2% is likely the year's peak, with pressure through FY27 and a roughly two-year whiskey inventory clearance. No new res...

**Distribution reshuffle:** RNDC's Chapter 11 and asset sales are moving territory to beer-led wholesalers (Reyes, Quality Brands, Columbia, Morales, Manhattan Beer). Reyes' 11-market, $5B+ deal makes RBG Spirits and Wine the No. 3 wine and spirits house. - **Southern Glazer's:** dropping "Wine & Spirits" from its name in early 2027, buying beer assets (AB's NYC operation, Clare Rose, Eagle Ro...

Distribution redraw (Martignetti-RNDC control states, RNDC bankruptcy breakup, Colorado franchise lawsuit vs. Constellation/Mark Anthony/Reyes); Diageo cost cuts and production pauses alongside Guinness strength; California wine supply-credit crisis (vineyard removals, custom-crush collapse, Napa lawsuits/foreclosures); post-Labor Day volume softness (beer/wine down, RTDs decelerating except pocke...

- **Key themes:** Two-speed US beverage alcohol market—volume contraction and credit stress in wine and mainstream beer versus price/premium/RTD/NA/digital resilience at scale players; California wine oversupply, vine pulling and bankruptcies; policy fights over dietary guidelines, New York grocery access, hemp/kratom, Canadian whisky tariffs; distribution consolidation and cargo-theft enforcement...

**Anniversary** - Episode 52. One year of the DrinxAI Weekly. Thanks to the distributor and supplier partners who provided feedback all year. - Year one defining threads: drinking participation at a record low fifty four percent; the RNDC collapse and wholesale reconsolidation under Reyes, Martignetti, and Southern Glazer's; the whiskey unwind from Stoli to Uncle Nearest; Gallo and Four Roses at s...

- Compliance: Southern Glazer’s $12.5 million NPA over retailer bribery; TTB no further action; Almave NA listing continues. - Inventories & destock: Evercore ISI July data, 1.66 inventory-to-sales ratio, pantry levels rising. - Off-premise NIQ (4 weeks to Aug 29): total alcohol –4.3% dollars / –6.1% volume; beer weakest; RTDs, NA, imports, super-premium holding; detailed brand and manufacture...

- **Key Themes**: Prolonged U.S. volume contraction in beer (16th month of tax-paid declines, BPI at 40, craft conglomerates under 25% growth), wine (light 2026 crush, tasting-room misalignment), and spirits (destocking, tequila weakness, Canadian whisky tariffs); RTDs, NA, and price/mix as sole offsets; wholesale fragmentation via RNDC Chapter 11. - **Notable Stories**: Saothair restores NAB/FIFC...

**Key Themes:** Record-low US drinking participation (Gallup 54%) colliding with cannabis surge (17% smoking, 15% edibles, use disorder doubling among 40-50s); no summer sales rebound (NIQ Total Alcohol -3.4% dollars/-5.3% volume; beer heaviest drag); dollars holding via price/mix, NA beer, sparkling, select RTDs and Mexican/super-premium SKUs while core beer, still wine and most craft stay volume...

- **Record-low participation and volume declines**: Gallup 54% adult drinking (Lydia Saad); NIQ off-premise $8.5bn -3.6%, volume -5.4% (Aug 8 four weeks); beer volumes -4.4% to -6.3%; wine dollars up, cases down ~7%. - **World Cup miss**: ABI $110m Michelob Ultra spend, Doukeris 0.25% lift; Circana/BeerBoard/BMI data show no category rescue; spirits RTDs (Cutwater, Surfside, Sun Cruiser) captured...

Key themes - Clinical moderation: AUD down about 4 million people; mild cases drove the drop; Surgeon General cancer advisory, youth cohort habits, cannabis substitution, and GLP-1s in the mix - Two-speed market: depletions and inventories stabilizing, not recovering; off-premise still the bottleneck; on-premise and World Cup occasions outperforming - RNDC breakup rewriting access and credit: K1RC...

- **Diageo reset:** ~$1B cost cuts ($850M operating model + $150M supply chain); organic sales –2% to $19.6B; NA –8.4%; US spirits –11.5%; dividend halved; guidance to low-single-digit sales / mid-single-digit OP growth; Smirnoff, Captain Morgan, Crown Royal value-pack push; Don Julio/Casamigos smaller formats; RTDs across cores; Guinness ~$1B to 2030; shares +5.6%. - **RNDC Chapter 11:** >$3B...

### Key themes - **RNDC Chapter 11** reshapes national wholesale; two-route-to-market split accelerates - **Two-speed industry:** price/premium/RTD/NA strength vs. volume, craft, and mid-tier pressure - **Wine supply destruction** in California alongside K-shaped demand - **M&A and succession:** Sazerac/Brown-Forman, Cobblestone/Campari assets, Whiting retirement - **Policy pile-up:** hemp thr...

**Week framed by:** Soft post-holiday off-premise demand, Brown-Forman CEO succession, Diageo cost/strategy reset, Canada/Mexico trade escalation, A-B decree expiry, RTD & NA outperformance ### Major corporate & leadership - **Brown-Forman:** CEO Lawson Whiting to retire on successor appointment; board search (chair Tracy Skeans); FY26 sales $3.9B (-1%), EPS $1.53 (-17%); FY27 flat organic...

**Key Themes** - Persistent off-premise softness (–2.7 to –3.1% dollars YTD/4-week ranges; volumes –3.9 to –4.9%) despite Independence Day and World Cup lifts. - Prepared cocktails/spirits-based RTDs and NA beer as primary growth engines; wine and craft under structural pressure. - Distribution shock from RNDC wind-down cascading into widespread payment delays; Reyes total-beverage rise and region...

**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...