US Beverage Alcohol Market, I’m Ready for Gradual Drug Nearing ‘Reset Year’

In what has been labeled a ‘reset year’ for the business, overall beverage alcohol (TBA) volumes in the United States are set to decline by -3% in 2023. Again, TBA value is projected to increase by +1% through 2023 – and the United States is projected to be the leading value expansion driver in some of the world’s mature wine markets in the coming years, with US$7.5 billion in incremental benefits by 2028. Dollars – which is a similar figure for India.

According to the latest data and forecasts from IWSR, the US beverage alcohol market faces several headwinds through 2023, including imbalanced inventory, financial pressures on consumers, and a greater focus on fitness and sobriety. As a result, the alcohol industry saw a decline in spirits sales – for the first time in nearly 30 years – as well as a decline in wine and beer sales. RTD posted modest volume growth capping a period of strong gains. IWSR forecasts are predicting continued sequential intake decline in the coming years, with 2023-28 TBA volume CAGR expected to decline by -1%.

“High inventory levels are expected to continue through 2024 and potentially beyond, with normalization not expected until 2025 or early 2026,” says Maarten Lodewijks, chair of the USA section at IWSR. “Consumer demand has to be increased to facilitate the movement of stock through the distribution chain.”

Between December 2019 and December 2023, stock levels of TBA increased, first due to increased demand during the COVID-19 pandemic, and then due to supply chain disruptions and making safe plans in difficult circumstances. This, in turn, has led wholesalers and stores to focus their efforts on safe biking, as well as attempt to reduce inventory to reduce their operating capital as interest rates rise.

This stock overstocking coincided with the peak of pandemic stimulus measures, as well as rising inflation, interest rates and bank card debt – all of which significantly reduced shoppers’ immediate earnings.

“Ongoing economic challenges are likely to continue to weigh on consumer spending and market dynamics,” says Richard Halstead, COO Shopper Analysis at IWSR. “As economic constraints have taken effect, IWSR’s BeerTrack consumer research shows that consumers have diverted spending from alcohol toward household essentials – leading to a significant decline in per capita alcohol consumption compared to pre- Has come down to epidemic levels.”

The pressure on immediate earnings has also increased the attrition for buyers to achieve the optimal price-to-quality ratio. As a result, buying and selling has softened, and the country has opted for cheaper potential alternatives rather than purchasing higher rates.

On the same note, consumer behavior in the United States is advancing in ways unseen in previous generations. More young LDA adults are prioritizing fitness and wellness, reducing alcohol consumption or abstaining altogether.

The generation that is consuming unhealthy alcohol is additionally promoting pastimes in positive branches, and particularly those that align with moderation and health virtues, such as no alcohol and low-alcohol, low-sugar. And low calorie.

The expansion’s alternative wallet in the United States comes with Agave Spirit and RTD. Mexican lagers and Prosecco have maintained expansion on the back of strong consumer commitment.

IWSR’s research on the United States beverage alcohol market additionally demonstrates:

Pressure Enlargement of Top Rate Beer Branches

The long-term decline of beer in the United States continued in 2023 as its volume currently fell by -3%. IWSR forecasts expect this growth to continue, with volumes expected to decline at a CAGR of -2% between 2023 and 2028. High rate and above payment branches remain the major value driving force of the division.

“Several factors are leading to this decline, including the fact that LDA + Gen Z consumers are not entering this category in the same way as previous generations,” says Adam Rogers, director of analytics for the North the US, IWSR. “There has also been a continued migration from beer to new categories like RTDs, not to mention increased moderation in general.”

Spirits are subdued, although agave makes the left-over a plus

The -2% volume decline recorded by spirits in 2023 was the first decline for nearly 30 years in the United States, and the IWSR predicts gradual growth in the coming years, with a projected CAGR of +1% between 2023 and 2028. doing. ,

Tequila will be the major generator of good points on that time scale – through premiums and the above expressions. Agave spirits recorded +4% volume growth during 2023, capping a period of double-digit growth, and the division is expected to continue expanding at a CAGR of +6% through 2028.

Soft market conditions impacted US whiskey, which recorded a -1% volume decline in 2023, although expansion is expected to return, with a 2023-28 volume CAGR of +2%, as strong demand for rye and bourbon continues. Is.

Due to its scale, the United States market will continue to be a major destination for malt Scotch, although the division now faces a more challenging trading situation, where consumers are more cost-conscious and particularly American whiskey. Are more attracted towards. Malt Scotch volumes declined by -12% in 2023, and flat growth is predicted until 2028.

2023 was also a troubled year for Cognac, as volumes declined by -17% and the division is expected to remain largely flat over the next few years due to overstocking. “The latest US Cognac shipment data indicates that inventories are beginning to decline,” says Halstead. “Meanwhile, IWSR’s most recent Bevtrack consumer data shows that the US Cognac consumer profile is returning to its pre-pandemic position, rebalancing toward higher income individuals.”

Wine difficulties overcome through Prosecco

The structural decline of wine in the United States continued in 2023, or even the once-booming department fell again. Currently total wine volume is -4% impaired, yet wines are falling -4% and sparkling is losing -3%.

Additional average declines are projected in the coming years, with IWSR forecasts indicating a CAGR of -1% for all wines between 2023 and 2028; Yet it is pushed through the vines, hoping to grow the vines that shine in the day.

“Prosecco continues to be a bright spot in the wine industry due to its affordability as well as the opportunity it provides to trade up to more premium expressions,” says Rogers. “The department gets additional benefit from its utility in trending spritz cocktails.

“Low-alcohol wines with ‘better for you’ characteristics are entering the market, increasing appeal and consumer interest. From a variety perspective, Sauvignon Blanc brands are currently the strongest performers, thanks to their freshness and Due to food pairing properties.

Along with FAB and cocktails/tall beverages, brewed tea is a major driving force for RTD

RTD expansion narrowed by 2023 as volumes grew by +1%, although IWSR’s forecast is expecting solid gains in the coming years with a 2023-28 CAGR of +3%.

Meanwhile, brittle tea is experiencing significant growth as a number of new brand entries try to realize the ratio and make the department premium. Cocktails/tall beverages and FABs are also in expansion.

Demonstration of wrong liquor continues

Most non-alcohol offshoots in the United States outpaced their parent segments in 2023, with non-alcohol beer being a major growth driving force and non-alcohol spirits gaining popularity in their third largest world market. Volume of non-alcohol beer increased by +19% on a day when volume of non-alcohol beer decreased by +38%. Both are expected to register strong double-digit expansion by 2028, with non-alcohol wines making smaller but still strong gains.

“The number of non-drinkers has increased significantly in many markets around the world, including the US – where it is growing from a very low base,” says Halstead. The share of drinkers in the United States who consume non-alcohol products is expected to double from 6% in late 2023 to 13% in early 2024, according to IWSR BeerTrack consumer data.