By Lori Wickett, Research & Communications Director
Beverage Industry reports on a wide range of marketing and manufacturing subjects for the beverage industry. Recently they held a state-of-the-industry webinar focused on alcoholic beverage news. Our interest was their beer and spirits trends, as well as tariff reflections thus far.
There has been a sustained consumption downturn as the economy has shifted over the past year. Changes in a discerning Hispanic market followed by 45,000 structures destroyed in the California wildfires have challenged revenues. While there has been much talk about cannabis infusion, the amount of this ingredient actually used in products is so minimal (due to legal levels required by the Farm Bill) that its impact is not potent enough to be measurable for those seeking that “buzz” factor. Unless something changes in the Farm Bill, presenters relayed that they do not see cannabis as a useful ingredient in the future.
2024 Stats:
- Beer sales were down 2.5% and non-alcoholic beer sales were up 21%.
- Spirits sales increased 1.7% but Ready-To-Drink (RTD) cocktails (also called Ready-To-Go or RTG) increased 23.7%; many states do not allow RTD items in C-stores or grocery stores; there is legislation introduced in various states to change these legally; Montana is pro-RTDs with the passing of HB226 in 2021.
- Some beer brands like Michelob Ultra returned to growth in 2024; while Constellation Brands have slowed some, they were still up for 2024.
- Flavored malt beverages (FMB) have increased their market share to 11.3%; the seltzer market is over-saturated, thus White Claw has returned to growth as other brands have fallen off.
- Cultural trends witnessed the sober-curious movement among young consumers, including observations such as “Dry January.”
- With supply chain chaos also came oversupply — which explains the difficulties in securing grower contracts in late 2024.
- While Anheuser-Busch brought some brands home to the U.S. for manufacturing (ex: Stella), consumers did not respond to this move as positively as they had hoped.
Forecasting 2025
Tariffs will likely impact the growth engines (beer, tequila, Irish whiskey, bourbon) but aluminum impacts on beer and RTDs are even more concerning. Beverage Industry expects small craft brewers to be hit the hardest. The general consensus was that while tariffs have not been early-positive, eventually the issue will resolve itself.
The RTD trend is certainly the bright spot coming out of last year and is expected to continue. These products were built on a groundwork of seltzers but now companies are taking them to a whole new level. They are flavorful, accessible and creative in packaging and name, making a curious customer more satisfied.
Not to be overlooked, the digital connection for consumers is a big player in what they choose. White Claw was initially driven by social media influencers; Poppi was based on TikTok success; Malort has 70,000 cult followers largely based on the consumer’s ability to create their own ads. This strength eminates through social connections — but don’t dismiss timing and authenticity.
My biggest takeaway from the Beverage Industry panel was that the demand for flavor is not going away, regardless of the beverage. Mature wine experts reminded everyone that wine has been up and down since the 80s but flavor always drives consumers back to the vine. The movers and shakers seem to be hard iced tea and spirits-based products; standout packaging for RTDs like Buzzballz or Beatbox (which have no carbination); and an expected third wave for Constellation Brands with their Pacifico and Corona Sunbrew lines.
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