Americans’ wine consumption dropped for the first time in 25 years

According to preliminary data from IWSR, total wine consumption in the US fell in 2019 (for the first time in 25 years), showing a -0.9% volume drop from the previous year. Wine (-3.8%) and beer (-2.3%) volume sales in the US both decreased for the fourth year in a row, although distilled spirits and ready-to-drink (RTD) products continued to see growth (+2.3% and +49.7%, respectively).

Despite declines in the beer category, which makes up the majority of the alcoholic beverages sold in the US, the total volume of beverage alcohol in the nation increased by 0.3% in 2019 (reversing a previous decline), reaching $167 billion (up 2.5% from 2018), despite the declines in the beer category.

Nation’s “total beverage alcohol” consumption increased

However, the nation’s “total beverage alcohol” consumption increased somewhat. There was an increase in the consumption of distilled spirits, including mescal, whiskey, and cognac. According to the survey, Tito’s Handmade Vodka has surpassed Smirnoff to become the most popular distilled spirit in America.

Additionally, the volume of drinks that are ready to drink increased by almost 50% last year, “mostly due to the enormous popularity of hard seltzers (brands like White Claw and Truly).” By 2023, the amount of hard seltzer is expected to treble. Cocktails in cans are likewise becoming more and more popular.

IWSR claimed that American consumers are spending more on high-end goods

IWSR COO Brandy Rand stated in the report that “the beverage alcohol business in the US continued to innovate in 2019, especially in the ready-to-drink category, while the struggle for consumption occasions intensified across all categories.

IWSR, which gathers its sales statistics from financial announcements and other confidential sources, claimed that American consumers are spending more on high-end goods. Sales of numerous well-known alcoholic products produced by Constellation Labels, including decreases in its low-end wine brands, have recently decreased. However, its high-end wine brands, such as Kim Crawford and Prisoner, which sell for more than $11 a bottle, are doing well.

The situation of other businesses

Other businesses, such as Anheuser-Busch InBev (BUD), are expanding their product lines to suit consumers’ shifting preferences away from calorie-dense beverages and toward healthier options. For instance, this month will see the launch of Bud Light Seltzer, Anheuser Busch’s third flavoured seltzer brand, joining Natural Light, which has a beer and fruit flavour, and Bon & Viv. The business has also been on the prowl for artisan breweries to buy.

Another issue for wine and spirits is tariffs. In addition to the 25% duty that is already in place on the majority of European wines and whiskies, President Donald Trump has proposed a 100% tariff on French wine and champagne. That was a response to the subsidies Europe gave to the aeroplane manufacturer Airbus (EADSF).

Some companies are temporarily boosting prices in order to cover the costs of increased tariffs

The producer of Jack Daniel’s, Brown-Forman (BFA), is feeling the effects of tariffs. The company stated in its most recent earnings report that it is temporarily boosting prices in order to cover the costs of increased tariffs imposed by the European Union without passing those costs forward to customers. Due to “uncertainty in the current economic and geopolitical situation in certain emerging economies and the travel retail channel as well as higher input costs,” it was compelled to lower its forecast for 2020 income growth by one percentage point.