What happened?
SipSource, the data and insight provider owned by the Wine and Spirits Wholesalers of America (WSWA), yesterday published its year-end report for 2024 and outlook for 2025. SipSource data represents over 60% of US wholesale Wine and Spirits depletions (without extrapolation) and it claims to be the most reliable predictor of market trends in the US spirits industry.
BNPP Exane View:
Below we highlight some observations that caught our eye in the SipSource report:
. 2024 depletions: SipSource estimates US spirits industry (inc. RTD) volume depletions declined -3.7% in 2024 (cf. -3.6% in 2023) while value depletions declined -4.3%. Excluding pre-mix cocktails / RTDs, core US spirits volume depletions declined -4.3% (cf. -5.1% in 2023). SipSource states that its 2024 prediction was 94% accurate for core spirits.
. 2025 forecasts: SipSource expects (if everything stays the same i.e. the current trade policy continues) 2025 could be a ''year of stabilisation in negative territory'' with minimal fluctuation expected across major categories. Stabilisation in 2025 is expected to pave the way for improved momentum in 2026. We would note that it is not clear if this forecast is just for spirits or wine and spirits combined.
. Consumer behaviour: ''Unlike previous cycles where volume shifted between categories, the overall decline signals a broader challenge facing the industry - changing consumer behaviors trending away from alcohol consumption.'' SipSource believes ''Shifting lifestyle choices - including the rise of moderation and abstinence trends - are reshaping consumption patterns. Additionally, the industry is facing competition from alternative adult beverages like energy drinks, botanical-infused drinks, and hemp-derived products, which are increasingly winning traditional alcohol consumption occasions''.
. 2025 by sub-category: SipSource expects Tequila to face growth uncertainty, particularly if new tariffs are introduced. US Whiskey and...
