**Top Stories**

- **Pernod Ricard & Brown-Forman confirm merger talks** — potential $31B combined entity; Citi puts deal odds at 50/50; Jefferies projects $450M in synergies; governance and balance sheet challenges remain

- **E. & J. Gallo closes $775M Four Roses acquisition** — highest price ever for a Kentucky bourbon distillery; returns brand to US family ownership after 83 years

- **Diageo North America CEO Sally Grimes departs suddenly** — replaced by 30-year veteran John O'Keefe; comes as Diageo US spirits sales fall 11.6%

- **Southern Glazer's acquires ~22M ABI beer cases in under a year** — Clare Rose, Eagle Rock, and ABI's NY distributorship; building parallel beer empire

- **Reyes Beverage Group acquires RNDC operations across 11 markets** — names Brian Albenze as market president

**Market Data**

- US bev-alc volume fell 5% in 2025 (IWSR); off-premise dollar sales down 2.7% in latest 4-week period (NIQ)

- Spirits ex-prepared cocktails: -6.1% dollars, -4.8% volume

- Wine: -5.1% dollars, -5.9% volume

- Beer: -1.3% dollars, -3.0% volume (improving sequentially)

- Prepared cocktails: +5.4% dollars — sole growth category

- Spirits-based RTDs: +35% value, +36% volume

- RTD share of total bev-alc: 6% (2019) ? 13% (2025)

- Only 54% of Americans report drinking alcohol (Gallup — new low)

**American Whiskey**

- Production down 28% YoY through August 2025; lowest since 2018

- 16.1M aging barrels in Kentucky — all-time record

- Exports down 19% ($250M decline); EU exports -35%, Canada -70%

- Jim Beam, Diageo, Brown-Forman all curtailing production; MGP contract business cut by more than half

- Green River lays off head distiller; LF Heritage ordered into foreclosure; Goodwood seeks merger

**Flavored Bev-Alc Power Rankings**

- Top 10 vendors control 81.2% of dollar sales

- BuzzBallz: $794M (+50.1%); Cutwater: $585M (+100.5%); BeatBox: $413M (+31.4%); Surfside: $191M (+115%)

- High-ABV (8%+) sub-segment: 36.9% of total, up 19.3% to $5.5B

**Wine**

- California 2025 crush: 2.62M tons (above expectations); 18 months of supply projected

- 38M US beer/spirits drinkers cite taste aversion as barrier to wine

- DtC wines above $50 = 71% of total shipment value (up from 52% in 2020)

- Imported wine volumes down ~8% Oct-Jan vs. domestic wines down 3%

**M&A & Deals**

- Tilray completes BrewDog acquisition at £41M (~$54.5M)

- Firestone Walker acquires Trumer Pils US rights from Gambrinus

- Hood River Distillers acquires Crater Lake Spirits

- Constellation acquires remaining HOPWTR stake

- KDP completes JDE Peet's acquisition; planning separation into Coffee Co. and Beverage Co.

- Sysco acquires Jetro Restaurant Depot for $29.1B

- Breakthru Beverage enters hemp THC beverage distribution in Minnesota

**Key Consumer & Macro Signals**

- Jefferies Consumer Pulse: 89 (lowest since Nov 2023)

- 31% of drinkers cite financial pressure as moderation driver

- GLP-1 drugs: 23% of users drink less dining out; 39% drink less overall

- Gen Z unemployment: 9.2%; cocktail prices exceeding $20 dampening on-premise occasions

**Legal & Regulatory**

- Oz Trading permanently enjoined from counterfeit Modelo/Corona labels

- Tito's Vodka ordered to pay $749K Maine back taxes

- ABI pays $2.3M Fairfield brewery emissions penalty

- TTB recommends delaying Q1 2026 CBMA claims due to data error

- Colorado bev-alc fee bill defeated in committee

- Treasury Wine Estates: shares down 63%; near-$1B US asset write-down flagged

**Top Stories:**

- **Pernod Ricard & Brown-Forman confirm active merger discussions** — potential "merger of equals" that would create joint #2 US spirits company; estimated $450M in cost synergies; Jefferies, TD Cowen, and ROTH weigh in on strategic logic, valuation, and Brown family governance hurdles

- **Uncle Nearest crisis deepens** — receiver seeks gag order and $75K sanctions against founder Fawn Weaver; $200M+ in total debts; employee resignations, distributor payment delays, and stalled asset sales

- **Stoli/Amber Beverage Group confirms loan default** — formal breach of loan note conditions amid sanctions, cyberattack fallout, Stoli USA insolvency, and declining global spirits demand

- **Molson Coors acquires Atomic Brands (Monaco Cocktails)** — boldest RTD move yet; Monaco is #5 US RTD brand with accelerating growth (+24.8% dollar growth in latest week); 70,000 retail doors; part of Horizon 2030 strategy

- **Tennessee Distilling Group acquires Waterford Distillery (Ireland)** — cross-border deal for distressed Irish whiskey assets; HSBC-appointed receiver facilitated sale

**Market Data & Trends:**

- NBWA Beer Purchasers' Index hits 50 — first expansion-level reading in 20 months; Imports (54), FMB/Seltzer (53), Below Premium (52) all above 50

- NIQ off-premise: total alcohol -2.7% dollars, -3.0% volume (L4W ending 3/14); Prepared Cocktails only positive category at +4.5% dollars

- NABCA February: spirits volume -1.4%, dollar volume -3.4%; wine volume -4.7%; RTDs and Tequila only positive growth categories

- US spirits tax-paid shipments -9.4% YoY in January — 15th consecutive month of moderation

- Non-alcoholic beverages +22% YoY, reaching $925M in off-premise sales; 92% of NA buyers still purchase alcohol

**Consumer Shifts:**

- LendingTree: only 56% of Americans currently consume alcohol; Gen Z at 53% non-drinking; 27% report drinking less YoY

- GLP-1 drugs: ~1 in 8 US adults currently on medication; JPM projects 30M+ users by 2030; potential $30B–$55B annual demand elimination

- On-premise vs. off-premise divergence highlighted at Constellation Gold Network Summit (HMSHost, Kroger, RaceTrac insights)

- Wine club growth decelerates to 2% (down from 11% peak in 2018); lifestyle-integrated models emerging (Ashes & Diamonds, Wente)

**Distribution Consolidation:**

- KEG 1 acquires Pine State Trading Co. (Maine/NH) — 7.9M cases, 350+ suppliers; second deal of 2026

- Southern Glazer's acquires Eagle Rock Distributing (CO) and Clare Rose (NY)

- Reyes to absorb RNDC operations across 11 markets (AZ, FL, TX, VA, DC, others) — closing by end of May

- AB InBev acquires Advance Beverage Company (Bakersfield, CA)

- Columbia Distributing acquires Point Blank Distributing (OR) — adds ~1M cases

- Teamsters Local 79 wins vote at SGWS Lakeland, FL facility

**Wine Industry:**

- US winery count falls 3% — first broad decline in decades; CA crush smallest since 1994

- Willamette Valley Vineyards: net sales -6.5%, operating income swings to -$1.4M loss

- Roco Winery (Marzotto family) acquires Francis Ford Coppola's Domaine Lumineux in Dundee Hills, OR

- Silicon Valley Bank projects "bumpy bottom" in wine demand around 2027–2028

**Other Notable Stories:**

- Celsius Holdings: stock -18% in past month; Citi calls it a buying opportunity; SKU rationalization driving short-term scanner data weakness; Costco Kirkland launch seen as limited threat

- Fever-Tree: profit -16% in FY2025; US revenue +6% at constant currency; Molson Coors partnership positioned as growth lever; non-tonic products now 45% of revenue

- BofA commodity trendspotter: spot inflation +3.7% YoY, geopolitical risk not yet reflected

- ADI/DISCUS launch "Ship My Spirits" DTC campaign; Iowa bills advancing

- DTC beer shipping survey: 81% of craft drinkers support expanded access; 72% would spend $50+/month

- Michigan AG sues Buon Vino LLC for unlicensed wine shipping — 84 confirmed violations, $25K per violation sought

- Bardstown Bourbon Co. files counterclaim against former HR VP

- TGI Fridays bankruptcy: court approves solicitation of creditor votes; confirmation hearing May 1

- ACSA: founding CEO Margie Lehrman retires; Emily Pennington named new CEO effective May 1

- NABCA: Kristin Beltzer (Michigan LCC) elected incoming Chair-Elect

- U. of Michigan Consumer Sentiment: 55.5, down from 56.6; inflation expectations stall at 3.4%

**Key Takeaways:**

1. The Pernod–Brown-Forman merger talks and Molson Coors' Monaco acquisition both signal that the era of organic growth in US beverage alcohol is giving way to an M&A-driven consolidation cycle across spirits, beer, and RTDs.

2. Spirits sector distress (Uncle Nearest, Stoli, Amber, Waterford) is systemic — creating both brand exposure risk and acquisition opportunities for well-capitalized operators.

3. Beer's BPI recovery and RTD resilience contrast sharply with ongoing spirits and wine volume declines, suggesting a widening performance gap between categories.

4. GLP-1 drugs, generational sobriety trends, and macro confidence erosion represent compounding structural headwinds that will reshape demand over the next 3–5 years — requiring portfolio diversification, non-alcoholic investment, and DTC channel development now.

5. Distribution consolidation (KEG 1, SGWS, Reyes, AB InBev) is accelerating and compressing the independent distributor landscape, making route-to-market control an increasingly critical competitive advantage.

- **Distribution consolidation accelerates:** Reyes Beverage Group expands RNDC acquisition to 10 states plus D.C.; SGWS acquires Clare Rose on Long Island; A-B InBev acquires Advance Beverage in Bakersfield, CA; SGWS faces federal indictment of former executives

- **Off-premise sales still declining:** Total alcohol dollars down -2.4% (NIQ 4-week) to -3.4% (TD Cowen 2-week); spirits ex-RTDs deepest at -6.6%; wine -5.3%; beer most resilient at -0.8%

- **RTDs are the only growth category:** Prepared cocktails +5.4% in dollars; Cutwater +116.3%, Surfside +240.3%, BuzzBallz +32.3%

- **Non-alcoholic beer surging:** +18.1% in latest Circana week, +9.1% in NIQ 4-week data

**Notable Company Moves:**

- **Constellation Brands:** Modelo accelerated to +6.9%, Pacifico +33.2%; Jefferies raised price target to $162; Hispanic consumer sentiment improving

- **Tilray:** Acquiring BrewDog's US assets (Columbus brewery/pubs, Las Vegas brewpub), completing global BrewDog brand ownership

- **Sazerac:** Acquired Dirty Shirley RTD brand, adding to portfolio alongside BuzzBallz, Buffalo Trace, Fireball, Southern Comfort, SVEDKA

- **Boston Beer:** New $25M share buyback plan; $50M total with prior plan; ~$215M remaining on $1.6B authorization

- **Brown-Forman:** Named Jim Peters (ex-Whirlpool) as new CFO, effective March 31; focus on operational discipline

- **Diageo:** New CEO Dave Lewis receives first LTIP; Jefferies models -12% North America EBIT in F27; shares at 25% discount to staples peers

- **Celsius/Alani Nu:** Combined share gained 141 bps to 15.7%; Alani Nu alone +58.9%

**Supply & Trade:**

- **California grape crush:** 2.76M tons — lowest since 1994; 23% below 5-year average; 57,000 acres removed; crop value down 16% to $2.414B

- **Italian wine exports to US:** Down -9.2% in value; H2 2025 down -23%; bottled red wine -28%

- **US TBA inventories:** Hit lowest level since Sept 2022 but remain 37% above 2019 average; prolonged normalization expected

**Consumer & Macro:**

- **Health-forward demand:** 58% of consumers scrutinize ingredients; 52% pay premium for wellness; 66% choosing lower-sugar options (EY survey)

- **NRF projects +4.4% US retail sales growth** in 2026 to $5.6 trillion; premium segments expected to outpace value

- **Scope Ratings:** Beer industry in "long-term structural stagnation"; pricing power exhausted

**Regulatory:**

- **New York wine-in-grocery legislation** faces unified opposition from UFCW and Metropolitan Package Store Association

**Legal:**

- **Uncle Nearest:** Bankruptcy petitions dismissed; receiver alleges $200M+ in debt; potential $75K sanctions against founder Fawn Weaver; receivership expansion pending; defamation countersuit filed

- US alcohol consumption hits record-low 54% of adults; structural demographic shift, not cyclical downturn

- Off-premise dollar sales declining across nearly all segments; prepared cocktails and RTDs the sole growth category

- Non-alcoholic beer continues double-digit growth but shows early signs of maturation

**Major Company Moves:**

- **Reyes Beverage Group** expands RNDC acquisition to 11 states (adding AZ, CO, LA, OK, TX); closing expected May 2026

- **Tilray Brands** acquires global BrewDog brand, Scottish brewery, and 11 UK pubs for ~$44M (~$66/bbl)

- **Diageo** outlines RTD-first growth strategy under new CEO Sir Dave Lewis; meaningful results not expected before FY2027

- **Brown-Forman** downgraded by Bernstein to Market Perform; wins Sixth Circuit labor ruling invalidating NLRB Cemex standard

- **A-B InBev** shares near five-year highs; spirits portfolio now 3% of US revenue, growing at 2x category rate

- **Boston Beer** closing Angel City brewery in LA (66 layoffs); brand sale has not materialized

- **Mercer Wine Estates** acquires four Washington wine brands from Avallé

- **Johnson Brothers** expands distribution partnership with Maisons Marques & Domaines into Colorado

- **Barboursville Vineyards** (VA) sold to investor group at 50th anniversary

**Wine Industry Crisis:**

- $1B+ revenue loss in 2025; ~6M case production drop; CA vineyard footprint down to ~477K acres

- Jackson Family Wines, E&J Gallo, Mission Bell Winery closures and layoffs

- DTC shipments fell 10% in 2024 — steepest decline ever recorded

- Wine at-home CPI in deflation at -1.5% YoY

**Craft Beer Update:**

- YTD craft dollar sales cooled to +0.3% (from +2.3% in Jan); volume now -1.6%

- Olfactory Brewing (SF) and Rotten Little Bastard (SC) filed Chapter 7 bankruptcy

- Standouts: Voodoo Ranger Fruit Force (+59.7% L4W), Georgetown Bodhizafa (+17.5%), Athletic Brewing (+18.3%)

**Legal & Regulatory:**

- Federal grand jury indicts five former Southern Glazer's employees in Albertsons bribery scheme (2016–2024)

- Uncle Nearest receivership deepens; Jay-Z's $20M secret loan surfaces; Farm Credit alleges fraud; federal ruling pending

- SCOTUS poised to rule on Arizona DTC wine shipping law

- New York opens retail-to-retail wine and liquor sales (up to 6 bottles/week)

- Florida Supreme Court ends 2026 cannabis ballot initiative

- Sixth Circuit Ream v. Treasury case could legalize home distilling

**Macro & Consumer Data:**

- Feb nonfarm payrolls: -92K; unemployment: 4.4%; CPI near 3%

- Wells Fargo expects 50bps of Fed rate cuts (June, September)

- NFIB Small Business Optimism declined for second straight month

- Kroger, Costco, BJ's post mixed retail results

- PwC: consumers willing to pay ~9.7% sustainability premium

- University of Evansville study: alcohol brand associations are culturally learned, not physiological

**Big Takeaways:**

1. Portfolio diversification across RTD, NA, and spirits is now a structural imperative — not a growth strategy

2. Wine's contraction is simultaneous across DTC and traditional distribution; surviving producers must pivot to experiential and premium DTC models

3. The Reyes-RNDC deal reshapes middle-tier economics across 11 states; affected suppliers must engage proactively before May close

4. Legal and compliance risk is elevated on multiple fronts; TTB trade practice enforcement should be treated as an active organizational priority

- Structural US alcohol market contraction deepens across spirits, beer, and wine

- RTD/Prepared Cocktails surge 30%+ as the only consistent growth category

- Southern Glazer's federal bribery indictment sends shockwaves through distribution

- Diageo abandons premiumization playbook; cuts hospitality team and dividend

- Tequila growth story stalls: Casamigos -24%, Jose Cuervo -15%

- Wine industry in worst structural correction in decades

**Major Corporate Moves:**

- AB InBev closes BeatBox acquisition for up to $490M

- Four Loko parent Phusion Projects exploring ~$400M sale via JPMorgan

- Tilray acquires BrewDog global IP and UK operations for £33M

- Brown-Forman ends Pabst FMB partnership, brings RTDs in-house

- Constellation Brands targets 75M cases for Pacifico by 2030

**Earnings & Financial Highlights:**

- Brown-Forman Q3 beats estimates but flags 100-150bps FY27 margin headwind; shares hit 52-week low

- Becle Q4 net sales -14.1%; US/Canada revenue -8.4%

- Campari full-year organic sales +2.4%; adjusted operating earnings +5.3%

- Monster Beverage writes off $232M of $330M CANarchy investment

- Treasury Wine Estates takes ~$550M US impairment

**Market Data (NIQ through Feb 21):**

- Total alcohol: -2.3% dollars, -3.3% volume

- Spirits ex-RTD: -4.9% dollars, -3.7% volume

- Beer/FMB/Cider/Seltzer: -2.2% dollars, -3.8% volume

- Wine: -3.8% dollars, -5.1% volume

- Spirits-based RTDs: +30.3% dollars, +33.5% volume

- Energy drinks: +16.6% dollars, +10.2% volume

**Brand Standouts:**

- Cutwater +160%, Sun Cruiser +247%, Surfside +87% (RTD)

- Pacifico +19% volume (7th consecutive year of double-digit growth)

- Victoria +16% depletions; Michelob Ultra +4.4%

- Alani Nu +81.1% (energy); Ghost Energy +37.6%

- Bud Light -9.7%; Heineken Original -13%; Casamigos -23.8%

**Wine & Spirits Industry Distress:**

- 40,000+ California vineyard acres targeted for removal

- Gallo, Constellation, Jackson Family all closing facilities

- Breakthru Beverage: 500 layoffs; Speyside Bourbon Cooperage: facility closure

- Uncle Nearest: $220M+ in alleged debts; receivership deepens

- Aloria Vineyards files Chapter 11; Arista Winery ends production

**Consumer Trends:**

- 54% of US adults report drinking — lowest in ~90 years

- Weekly consumption: 2.8 drinks, lowest since 1996

- 53% believe moderate drinking is harmful (up from 28% in 2018)

- Private label liquor unit sales +4.4%; Gen Z share rising rapidly

**Regulatory & Legal:**

- TTB issues AI advertising guidance for beverage alcohol

- Bardstown Bourbon faces whistleblower discrimination lawsuit

- Mississippi ABC warehouse disruption strains retailers statewide

- Former Napa winemaker sentenced for appellation fraud

- US bev-alc market showing tentative recovery; January 2026 comps turned positive for first time in over a year

- RTD cocktails dominate growth: spirits-based RTDs +39.4%, wine-based RTDs +23.7%

- Premium spirits correction deepening: Diageo US sales -6.8%, MGP brown goods -52%

- Generational consumption shift accelerating; binge drinking among 21-34 year olds down ~3.9 million people over decade

- Regulatory uncertainty compounding across THC, tariffs, distribution, and state-level wine sales

**Notable Stories:**

- **Diageo** — New CEO Dave Lewis plans sweeping leadership overhaul; halves dividend; signals pivot away from premiumization; shares drop ~13%

- **MGP Ingredients** — FY25 sales collapse 24%; 2026 guidance misses consensus by wide margin; shares fall 21% intraday

- **Uncle Nearest** — Receivership escalates; ~$200M total debt; emergency asset sales underway; March federal court ruling expected

- **Stoli Group** — Amber Beverage Group confirms default; no permanent CEO since July 2025

- **Molson Coors** — Horizon 2030 strategy with $450M savings program; BofA downgrades to Underperform; M&A targets discussed

- **Boston Beer** — Q4 loss narrows; gross margin improves 360bps; 2026 guidance below consensus; tariff uncertainty flagged

- **Celsius Holdings** — Q4 revenue +117% YoY on Alani Nu strength; competitive pressure on bev-alc among younger consumers

- **Southern Glazer's & Breakthru Beverage** — Both announce workforce reductions

- **THC beverages** — Federal ban effective November 2026; industry mobilizing for legislative fix before summer recess

- **US wine exports** — Collapse 33.5% to $850M; Canada exports down 76.8%

- **California wine** — Major closures at Jackson Family Wines, Gallo, Foley, Constellation; Treasury Wine Estates pauses dividend

- **NA beer** — Growth decelerating; Michelob Ultra Zero +210%, Athletic Brewing holds lead but growth slows

- **Convenience stores** — Spirits +5.4%; THC beverages +134% to $200.5M; retailers cutting alcohol SKUs for THC shelf space

- **Supreme Court tariff ruling** — IEEPA authority struck down; effective rate drops to ~13%; Section 301 investigations pending

- **KDP/JDEP** — Acquisition targeting early April close; ~$9B debt, $8.5B equity, $4.5B convertible preferred

- **Key brand performers** — Cutwater, BuzzBallz, Surfside, BeatBox, Sun Cruiser (RTD); Modelo, Pacifico, Michelob Ultra (beer)

- **Distribution** — Barton & Guestier signs five-year exclusive with Southern Glazer's; Mississippi ABC warehouse in crisis

- **People** — Daniel Duckhorn passes at 87; Melanie Batchelor named William Grant US President; Robert Cullins elevated at Illva Saronno; Brandon Lieb named Aguasol CEO

- **Retail** — Sprouts Farmers Market plans 40+ new stores; NY wine-in-grocery legislation opposed; CA distribution law challenged

- **Compliance** — TTB "bottle marrying" prohibition gains national attention; risk reminder for on-premise operators

- **Wholesale inventories** — 43% above 2019 average per Evercore ISI; inventory-to-sales ratio remains elevated

**Big Takeaways:**

1. RTDs are redefining the volume story — growth is concentrated among scaled brands with major distribution networks

2. The US spirits correction is deeper and longer than consensus; MGP's guidance suggests no bottom until at least mid-2027

3. Regulatory and trade headwinds are compounding — THC ban, tariffs, state-level battles all demand proactive engagement

4. The generational shift away from alcohol consumption is structural, not cyclical — energy drinks, fitness, and moderation are permanent competitive forces

- Broad-based U.S. volume declines across beer (-5.9% full-year shipments), spirits (-7% value), and wine (DTC -14% volume in OR/WA)

- Distribution tier structural contraction: Breakthru cuts ~500 jobs; RNDC shed 1,700+ in past year; Reyes in active talks for further consolidation

- RTD cocktails as the dominant growth engine: +7.1% dollar sales (NIQ), +35.2% value growth and +382 bps share gain (Jefferies)

- K-shaped consumer spending visible across every category and channel

**Major Earnings & Financial Results:**

- **Pernod Ricard:** H1 revenue €5.26B (-14.9% reported, -5.9% organic); U.S. sales -15% vs. consensus -13%; global headcount reduced by ~2,400

- **Molson Coors:** Q4 net sales $2.66B (-2.7%); U.S. depletions -5.1%; FY26 EPS guided -11% to -15% YoY — shares fell 7.4%

- **Heineken:** U.S. net revenue down high-single digits; U.S. volumes down low-teens; planning 5,000–6,000 global job cuts over two years

- **Treasury Wine Estates:** A$770.5M U.S. asset impairment; A$649.4M statutory loss; dividend paused

- **Suntory:** Alcohol sales -0.4% to ¥1.38T; pausing Kentucky Beam campus production through end of 2026

- **Brown-Forman preview:** Citi expects organic sales -3.6%, EPS $0.46 for fiscal Q3 (reports March 4)

**Distribution & Route-to-Market:**

- Breakthru Beverage: ~500 layoffs across FL, IL, CO and other markets

- RNDC: 1,700+ cuts in 2025; exited California; additional cuts in IN, WA, OR; Becle (Jose Cuervo) exited RNDC near-nationwide

- Reyes Beverage Group in "active discussions" with RNDC across six states + D.C.

- Hand Family Companies formed Sunset Distributing (Stone + Classic Beverage + Scout) in SoCal

- NBWA survey: Distributors expect beer to drop from 76% to 67% of portfolios within five years

**Wine Sector Distress:**

- Gallo closing Ranch Winery (St. Helena); 93 total jobs cut across five CA locations

- Trinchero listing Haystack (Atlas Peak) and Clouds Nest (Mt. Veeder) vineyards for sale

- Foley Family Wines closed Chalone Vineyard's Soledad facility; laid off entire winemaking staff

- Vineyard/winery transaction market projected at less than half of 2021's ~$3.5B volume

- DTC bright spot: $200+ Cabernet +14% value; $10,000+ bottles +28% YoY

**Strategic Moves & Deals:**

- Tilray signs five-year U.S. licensing deal with Carlsberg Group (Carlsberg, Kronenbourg 1664, others) effective Jan 2027

- Hotaling & Co. closing Pier 50 distillery; pivoting to import/brand-building model

- Stoli Group: founder Yuri Shefler steps in as interim CEO; Amber Beverage Group confirms loan default; U.S. ops and Kentucky Owl in bankruptcy

- Oregon Beverage Collective formed; Crux Fermentation acquired by Cascade Lakes owners (~40K barrels combined)

**RTD & Emerging Categories:**

- RTD cocktails: only growing major segment in NIQ data (+7.1% dollars); 36.2% of on-premise packaged volume

- Top RTD performers: Cutwater +114.7%, Surfside +223.5%, Sun Cruiser +349.5%, Buzzballz +41.8%

- Non-alcoholic beer: 5.4% of on-premise packaged share (+1.4 pts); 94% of distributors added NA suppliers in past year

- THC beverages: Indeed Brewing at 15–20% of volume, 25–35% of revenue; Scofflaw expects THC >50% of revenue

**Regulatory & Legal Updates:**

- **New York:** SB 9220 would allow liquor retailers to sell THC beverages (=5mg/serving); separate bill would allow grocery stores to sell wine and liquor

- **Iowa:** HF 2403 advances to end state liquor distribution monopoly (13-8 committee vote)

- **Maryland:** Legislation introduced to allow grocery beer and wine sales

- **Illinois:** Considering lowering BAC limit from 0.08 to 0.05

- **Kentucky:** HB 612 would add 4% license fee on top of 6% sales tax (10% effective rate)

- **Mississippi:** ABC warehouse software failure causing weeks-long supply crisis statewide

- **Federal:** Supreme Court asked to resolve wine retailer shipping ban circuit split (Day v. Henry)

- **TTB:** FD&C Red No. 3 ban in alcoholic beverages; reformulation deadline January 15, 2027

- **Hemp/THC:** Congressional decision window approaching on whether to regulate hemp beverages under three-tier system

**Consumer & Retail Signals:**

- Walmart fiscal Q4: $190.66B revenue; U.S. comps +4.6%; e-commerce +27%; CFO flags K-shaped income pressure

- CPI: Alcohol-at-Home +0.6% YoY; Alcohol-Away-from-Home +3.6% — retail pricing power eroding

- Restaurant traffic: 5 consecutive months of decline; 75% of diners prefer smaller portions for less money

- GLP-1 adoption estimated at 12% of Americans, impacting portion sizes and occasion frequency

- American Whiskey Association pushes back on "glut" narrative; ~16M barrels aging in Kentucky; global market ~60–62M 9L cases

**On-Premise Data (BeerBoard 2025 Year in Review):**

- Total on-premise revenue -0.6%; volume +0.1%

- Draft: light lager dominant at 43.5% share (+1.4% volume); IPAs -8.5% volume

- Spirits: agave 30.4% share (+0.5 pts); vodka -1.4 pts; rum -3.9 pts

- Packaged: RTD cocktails 36.2% share (+1.7 pts); NA beer 5.4% share (+1.4 pts)

**Key Leadership & Corporate News**

- Constellation Brands CEO transition: Nicholas Fink succeeds Bill Newlands effective April 13, 2026

- Heineken announces 5,000-6,000 job cuts (7% of workforce) over two years; targets €400-500M annual savings

- AB InBev FY25 EBITDA at $21.2B; guides FY26 organic growth of 4-8%

- Coca-Cola consolidates Red Tree Beverages and BodyArmor under North American Operating Unit

**M&A Activity**

- E.&J. Gallo acquiring Four Roses Bourbon from Kirin for $775M

- Crimson Wine Group acquires Raeburn brand (~250K cases) from Purple Brands

- Carolina Premium Beverage and United Beverages NC merging to form 18M-case United Carolina Beverages

**Financial Distress & Restructuring**

- Uncle Nearest: $164M total debt; receiver alleges $30M revenue overstatement, unpaid taxes since 2018

- Stoli USA: Judge orders Chapter 11 trustees for orderly asset sale

- RNDC layoffs continue (~100 in FL, ~40 in TX); potential sale of 7 markets to Reyes Beverage Group

**Market Performance (4 weeks ending Jan. 31)**

- Total Alcohol: $7.2B (+0.6% dollars); 136M cases (-0.2% volume)

- RTD: +8.8% dollars, +3.0% volume

- Beer: +0.9% dollars, -0.4% volume

- Wine: +0.3% dollars, -1.4% volume

- Spirits: -2.8% dollars, -1.3% volume

- NA Beer: +7.0% dollars, +5.7% volume

**Wine Industry Reset**

- DTC wine: 5.4M cases, $3.7B in 2025 (down 15% volume, 6% value YoY)

- California vineyard removals: ~40,000 additional acres expected in 2026

- Average DTC bottle price: $56.78 (up 11%)

**Trade & Tariffs**

- US Scotch exports down 4% value, 9.2% volume in 2025

- Post-April tariff (10%): May-December shipments down 15% volume, 7% value

- Mexico tequila oversupply: ~500M liters unsold; agave prices collapsed from 30-32 pesos/kg to 2-5 pesos/kg

**Consumer Trends**

- Dry January: 88% adherence among participants; 17% overall participation (Gen Z 32%, Millennials 26%)

- Oral GLP-1 (Wegovy pill) availability in 2026 may accelerate medication adoption

- World Cup 2026: 58% plan to follow; 49% say beer will be drink of choice at bars/restaurants

**Regulatory Watch**

- Supreme Court case challenging Arizona's in-state retailer requirement for wine shipping

- New York grocery wine/spirits legislation gains momentum

- Chicago liquor tax changes effective March 1, 2026

- Heaven Hill defending Lunazul "100% agave" class action

**Key Takeaways**

1. Growth is increasingly mix-led—RTDs, NA, cider, and select imports carrying the market

2. Distribution restructuring is a first-order commercial variable affecting supplier strategy

3. Whiskey oversupply creating M&A opportunities and production adjustments

4. Wine's reset is structural—supply, DTC, and regulatory changes converging

5. Moderation is normalizing beyond January with potential GLP-1 acceleration

- **RTD Revolution**: Ready-to-drink cocktails drove +17.1% volume growth; spirits excluding RTDs were -2.7% volume

- **Historic Milestone**: Spirits overtook beer in U.S. revenue share (42.4% vs 41.8-41.9%)

- **Consumer Caution**: Affordability-first behavior intensifying; Hispanic consumer concern affecting on-premise traffic

- **Wine's Structural Reset**: Participation down to 29% of adults; 512 fewer wineries YoY

- **Distribution Disruption**: RNDC California exit causing ripple effects; consolidation accelerating

### Major Company Moves:

- **Kirin** selling Four Roses bourbon to E&J Gallo for up to $775 million

- **AB InBev** acquiring 85% stake in BeatBox for $490 million

- **Johnson Brothers** becomes #3 U.S. wine wholesaler via Maverick acquisition

- **Barrell Craft Spirits** consolidating facilities, selling Jeffersontown site

- **New Belgium** restructuring with workforce reductions

- **WhistlePig** CEO departure; Alex Roberts named new CEO

- **Uncle Nearest** receivership continues; ~$100M debt, potential Q2 sale

### Key Data Points:

- U.S. spirits overall: +1.9% volume, -2.2% value (2025)

- Prepared cocktails: +37.3% volume (latest 4W)

- Tequila: -6.5% December sales (NIQ); Casamigos -22.1%, Don Julio -11.4%

- Beer: +2.2% volume latest 4W vs -1.1% prior; improving trend

- Michelob Ultra: +9.0% volume; Bud Light -6.2%

- Modelo: +4.5% volume; Pacifico +14.9% dollars; Victoria +29%

- NA Beer: +24.9% dollar growth

- Wine: $114B value (+5%) on 366M cases (-1.7%); 29% participation rate

- California vineyards: 38,134 acres removed Oct 2024-Aug 2025

### Regulatory & Trade Updates:

- U.S. importers paid $200M+ in tariffs through October

- U.S. spirits exports to Canada at ~25% of prior levels

- Washington state Senate passed 0.05% BAC bill

- NY denied Trader Joe's wine store application

- Supreme Court amicus brief on AZ wine shipping rules

- Cannabis rescheduling executive order could impact THC beverage competition

### Consumer Trends:

- 54% of U.S. adults drink alcohol (near 90-year low)

- ~50% of Gen Z adults drink

- 12% of U.S. adults on GLP-1 medications

- Cannabis drinks +8.2% YoY; shots +23.1%

- 18M frequent cannabis users vs 15M frequent alcohol users

### Key Themes This Week:

- **U.S. demand showing modest improvement** but still negative; off-premise total alcohol -1.2% (improved from -3.4%)

- **RTD/Prepared Cocktails remain the clear winner** at +7.4% dollar growth

- **Wine DTC in structural decline**: -15% volume, -$230M value, average bottle price up 11% to $56.78

- **Distribution disruption accelerating**: RNDC losing major suppliers; Delicato, Johnson Brothers, Breakthru expanding

- **Inventory overhang persists**: wholesaler levels ~45% above 2019 average

### Notable Deals & Moves:

- **AB InBev acquires 85% of BeatBox** for $490M (implies ~$575M valuation)

- **ABC Fine Wine & Spirits acquires Applejack** (Colorado) — first out-of-state acquisition in 90 years

- **Sazerac partners with Piedmont Distillers** for Midnight Moon distribution

- **Columbia Distributing acquires Point Blank Distributing** in Portland

- **Scribe Winery acquires Arrowhead Vineyard** (150 acres, Sonoma)

### Supplier Earnings Signals:

- **LVMH Moët Hennessy**: Q4 organic sales implied at -9%; Cognac & Spirits -12% for the year

- **Diageo**: Potential Q3 destocking risk; H1 organic sales outlook -2.2%

- **Campari**: Q3 organic sales +1.3% projected; holiday season slower than expected

### Regulatory & Legal Updates:

- **Chicago permits hemp THC beverages** (up to 10mg/12oz) at licensed venues; United Center to sell

- **Federal HEMP Act introduced** to place CBD under FDA oversight

- **Retailer shipping cases** seeking Supreme Court review (Arizona, Indiana)

- **Wynn Resorts** under federal probe for alleged liquor-contract issues

- **McIlhenny (Tabasco) sues Stoli** over pepper vodka trade dress

- **Uncle Nearest** remains in receivership; Feb. 9 court hearing scheduled

### Consumer & Market Data Points:

- Only **54% of U.S. adults** say they drink alcohol (Gallup) — lowest in 90 years

- Wine drinkers reducing: **46% cite calories, 39% cite sugar**, only 21% cite cancer risk

- Gen Z = **4% of alcohol sales**; Gen X + Boomers = **70%**

- Super premium beer now **40.7%** of beer volume

- High-ABV products **+11% YoY**; Non-alcoholic **+26% YoY**

- California wine crush estimates: **~2.1-2.25M tons** — potentially smallest since 1980

### Key Takeaways:

1. **The market is stabilizing, not recovering** — growth requires activating specific occasions and channels

2. **On-premise is the relative bright spot** — experience-led occasions showing better price elasticity

3. **Wine's challenge is as much perception as consumption** — sugar/calorie misconceptions driving substitution

4. **Distribution is a strategic lever** — realignments creating winners and losers

5. **The competitive set is expanding** — hemp THC, NA, and high-ABV all claiming occasion share

- **Wholesaler signal:** NBWA’s January Beer Purchasers’ Index rebounded sharply vs. December, with **below-premium** reaching an expansion threshold—though overall conditions remain cautious.

- **Beer pricing reality:** Industry leaders say the era of dependable annual price hikes is fading; focus shifts to **pack/price architecture** and tighter value ladders.

- **Moderation & substitution:** Dry January and longer-run data point to sustained moderation; **NA beer and RTDs** remain key beneficiaries.

- **RTD momentum:** RTDs continue to capture occasions and attract investment, reshaping innovation priorities.

- **Wine split:** Off-premise remains pressured while on-premise—especially fine dining—acts as a stabilizer; California supply may tighten later after a sharply lower 2025 crush.

- **Spirits overhang:** American whiskey faces heavy inventory and declining shipments, driving production/asset decisions and increasing the odds of future price pressure.

- **Big route-to-market story:** **RNDC exits California**, triggering rapid supplier and brand realignments (including Tito’s and Brown-Forman moves) and creating near-term service risk—and competitive opportunity.

- **California regulatory updates:** Expanded **DTC spirits shipping** (for qualifying craft distillers) and new **mandatory EFT payments** from retailers to wholesalers starting 2026; compliance scrutiny rising around kratom products.

- **Adjacent adult products:** Hemp-THC regulation pressure builds; Curaleaf exits hemp-THC, and retailers push for federally regulated, age-gated frameworks.

- **Macro undercurrent:** Private label and value retail expansion continue to pressure pricing power and reward operational excellence.

- **Beer 2025 wrap:** Total beer finished down in dollars and volume; **domestic premium weakened** while **domestic super premium and NA beer grew sharply**

- **Channel signal:** Convenience stores are holding up better for beer, with **NA beer surging** and seltzer stabilizing relative to broader retail

- **On-premise vs off-premise:** Alcohol pricing **away from home is rising faster** than at-home inflation, reinforcing the battle for occasions and mix

- **Distribution disruption risk:** RNDC uncertainty and supplier exits are accelerating wholesaler consolidation; **route-to-market stability is now a P&L issue**

- **Demand + inventory backdrop:** Moderation trend remains strong; elevated inventories increase the risk of shipment volatility and promo pressure

- **Hemp tightening:** Federal and state actions are narrowing the intoxicating hemp playing field—**higher compliance costs, fewer gray areas**

- **Wine watch:** Ongoing off-premise softness plus new sourcing/transparency scrutiny (including “American” labeling proposals)

- **Big takeaway:** Growth is available, but it’s concentrated—winning in 2026 means aligning portfolio bets with the right occasions, channels, and distributors while staying ahead of regulation

RTDs and prepared cocktails remain the clear growth engine, growing dollars despite softer volumes

Beer declines continue, but super-premium, import, and non-alcoholic segments are gaining share

Spirits face mounting pressure outside of RTDs, with visible financial stress among smaller operators

Wholesaler inventories remain elevated, driving tighter SKU discipline and cautious buying into 2026

Supplier distribution strategies are shifting toward regional and mid-tier partners for better execution

Health-and-wellness narratives, moderation, and substitution (NA beer, THC beverages) are now structural demand factors

Wine demand is increasingly bifurcated, with growth concentrated in imports and sparkling wines

Major suppliers shift to margin protection and inventory management over capacity expansion

Constellation Brands expected to hold earnings despite beer depletions near -4%

U.S. consumers still spend big on alcohol, but value and occasion-based trade-offs are accelerating

RTDs dominate growth both on- and off-premise; NA beer emerges as a quiet winner

Wine DTC volumes slide hard, but ultra-premium Cabernet remains resilient

New York supermarket wine proposals and cannabis competition raise route-to-market risk

Kroger and Instacart developments highlight rising stakes in e-commerce economics and transparency

Promotion strategies are diverging: spirits promo depth rising; beer promos more measured; non-alcohol promo behavior varies by segment.

American whiskey is retrenching output amid elevated inventories—raising the stakes on inventory agility and long-term capacity planning.

Wine is the week’s clearest stress point with debt-impaired outcomes and major impairments signaling a reset—while premium and sparkling show relative resilience.

RTDs stay hot with standout brand growth, drawing continued capital and leadership attention.

Craft beer faces structural pressure in grocery, pushing more “third space” and lower-ABV experimentation.

On-premise remains choppy, with traffic/value sensitivity and tourism headwinds affecting higher-margin occasions.

E-commerce opportunity is real but maturing: growth shifting to omnichannel and on-demand, while DTC looks flatter.

Cannabis policy volatility surged with a Schedule III push; longer-term risk is stronger cannabis competition via improved economics (potential 280E relief).

Industry rationalization continues: portfolio optimization, distribution digitization, and beer capacity rebalancing signal a market adjusting to a new baseline.

• AB InBev moves to buy 85% of BeatBox (up to $490M, close expected Q1 2026), reinforcing RTD/FAB consolidation.

Beer remains soft, but share battles intensify

• Beer shipments down YoY; analysts see stabilization in pockets but continued declines overall.
• Category winners focus on execution, price/mix, and channel strength.

Spirits: trade-down + RTD boom

• Premium pressure shows up in tier data; meanwhile prepared cocktails/RTDs surge with standout brand growth.

Wine: supply correction + major WA ownership change

• Wyckoff Farms buys Ste. Michelle Wine Estates; broader U.S. wine still working through excess inventory and reduced crush expectations.

Channel shifts

• Value retail (Dollar General expansion) and grocery-policy debates point to distribution battlegrounds heading into 2026.

Regulatory watch

• Hemp-derived intoxicants face tighter scrutiny and a ticking clock toward Nov 2026, with competing proposals to define national standards.

Beer check-in: October shipments down ~3–4% YoY, but scanner data show a holiday rebound; non-alcoholic beer and super-premium brands like Michelob Ultra, Pacifico, Guinness, and White Claw lead growth while core segments remain soft.

Spirits snapshot: Slight volume declines overall, with Tequila and RTDs still growing; whiskey is bifurcating—premium and export strong, value segments weak—against a backdrop of tariffs, craft bankruptcies, and ongoing M&A and capital raises.

Wine under pressure: Off-premise wine is down mid-single digits; Treasury Wine takes a ~$450M impairment on its U.S. business, while premium and DTC pockets stay resilient and Millennials become the largest wine-drinking cohort.

Channel shifts: Dollar stores and private label emerge as key pressure valves for value-seeking shoppers; delivery platforms and B2B marketplaces (DoorDash, Instacart, Provi) keep reshaping discovery and fulfillment.

Non-alc & energy momentum: Non-alcoholic beer and energy drinks post double-digit growth, with robust innovation pipelines targeting moderation, function, and flavor-forward occasions.

Cannabis interplay: New recognition of cannabis hyperemesis and fresh evidence of cannabis-alcohol substitution underscore how cannabis is reshaping some drinking occasions.

Regulatory and legal watch: Heightened scrutiny on pay-to-play, underage sales, ultra-processed foods, gig-worker rules, and non-competes; New York’s wine-in-grocery push could materially change off-premise wine distribution in 2026.

• Elevated inventories (inventory/sales ratio 1.67) continue to pressure pricing, innovation, and depletions.
• Consumer caution deepens: weaker sentiment, reduced alcohol participation, rising non-alcoholic preferences.
• Category divergence persists—RTDs and premium agave outperform; wine and beer face continued softness.

Key Stories

• RTDs +3.7% weekly dollars; strong growth in wine-based seltzers and single-serve cocktails.
• Beer weakness continues off-premise; on-premise shows better seasonal momentum and trial-driven opportunities.
• Wine softness intensifies—shrinking consumer base, Napa acreage abandonment, and slower depletions.
• Walmart, Kroger, and private label trends reshape retail economics and pack/price strategy.
• Regulatory tension: TTB backlog, Colorado grocery wine fallout, THC beverage distribution debates.
• Corporate moves: Diageo CEO transition with renewed focus on value tiers; Simi acquired by WarRoom Cellars.
• Compliance & digital risk: NY underage enforcement and DoorDash data incident impact holiday-season risk management.

Takeaways for Operators & Suppliers

• Lean into RTDs, NA offerings, and seasonal on-premise programs.
• Protect velocity with pack/price architecture; plan for retail trade-down.
• Prepare for innovation delays due to TTB backlog.
• Monitor THC beverage policy shifts and data-privacy requirements for delivery partners.

• Federal clampdown on intoxicating hemp cannabinoids sets up a major 2026 reset; FDA guidance due within 90 days.
• California launches a 2026 craft distillery DTC pilot, offering a key release valve for oversupply.
• Airports, airlines, and municipalities tighten alcohol service norms; litigation highlights labeling and pricing scrutiny.

Market Performance

• U.S. spirits decelerate; Diageo expects ~–6% U.S. decline.
• Beer outlook worsens globally; craft continues to contract.
• Wine accelerates toward long-needed supply correction after a two-decade-low crush.
• Weekly U.S. scans: total bev alc down 4.5% YoY; non-alc beer +18%.

Consumer Behavior

• Caution dominates: essentials up, discretionary units down.
• On-premise responds to value—Texas Roadhouse, Chili’s outperform through pricing and operations.
• Gallup shows only 54% of adults drink; moderation and wellness shifts continue.

Retail, Digital & Distribution

• Private label accelerates: projected $280B in store-brand sales; Aldi expansion and Kirkland scrutiny in spotlight.
• Provi surpasses $5B GMV, reducing admin time for reps and boosting compliance for chains.
• Gopuff raises $250M and returns to growth mode.

Corporate Moves & Portfolio Strategy

• ABI exploring up to $700M acquisition of BeatBox; “beyond beer” momentum builds.
• Tilray beverage +19% FY25; consolidation continues across beer and spirits.
• Non-alc brands like Liquid Death gain route-to-market muscle and cold-box share.

Structural Risks

• Spirits exports drop sharply; inventories at multi-decade highs.
• Craft distillery count down 25% YoY; closures and liquidations increasing.
• Health-risk messaging gaining traction, raising long-term regulatory questions.

• Hemp THC crackdown

• Congress passes language that effectively removes most high THC hemp drinks from legal commerce within about a year, with strict total THC caps per container.

• State attorneys general, alcohol trade groups and ongoing litigation increase compliance and portfolio risk for distributors and retailers carrying hemp beverages.

• Demand and consumer backdrop

• Consumer sentiment falls back toward twenty twenty two lows and more than a third of shoppers plan no alcohol purchase for Thanksgiving, with another quarter cutting back.

• GLP 1 adoption reinforces moderation trends as users cite alcohol as their top avoided item.

• Category performance

• Beer remains the main drag, with shipments near multi decade lows and recent four week scans showing high single digit volume declines.

• Core spirits segments are now in decline, while spirits based RTDs and non alcoholic alcohol grow in the mid to high teens or better.

• Wine works through a structural oversupply with vineyard removals, fewer wineries and a buyer starved M and A market.

• Trading down and mix shifts

• Premium fatigue is visible in tequila and other core spirits, with consumers trading into smaller packs and more affordable tiers.

• Sub premium beer is regaining share and private label wine is advancing as shoppers prioritize value.

• Corporate and capital moves

• Constellation cuts beer growth expectations and restructures, while still investing heavily in Mexican capacity.

• Diageo prepares for a new chair, Campari focuses on deleveraging, AB InBev launches a six billion dollar buyback, Boston Beer and Coca Cola Consolidated also repurchase shares.

• Ardagh’s recapitalization reduces packaging supply risk for can dependent categories.

• Channel and payment economics

• Warehouse clubs and ecommerce outperform while independents, craft breweries and smaller on premise venues feel strain.

• A proposed Visa Mastercard settlement offers minimal fee relief but enables surcharging and selective card acceptance, forcing new point of sale strategies.

• Compliance and legal risk

• Bribery and pay to play cases involving major suppliers, distributors and retailers signal tougher tied house enforcement ahead.

• Permit related litigation highlights operational exposure to regulatory delays for co packers and RTD producers.

• Health behavior and policy signals

• Rising GLP 1 use, additive free tequila scrutiny and National Academies anchored Dietary Guidelines point to a more cautious regulatory and consumer stance on alcohol into twenty twenty six.

• Beer BPI at 24, 11 months of contraction. Q3 on-premise: draft –1.8%, packaged –5.1%.
• Off-premise week ending Oct 26: TBA –5.5% YoY; beer –7.2%, wine –4.5%, spirits flat. Premixed cocktails +34%.
• September domestic beer shipments +1% YoY, but YTD –5.1%.

Share movers and bright spots

• Draft leaders: Michelob Ultra, Miller Lite, Coors Light, Modelo Especial, Bud Light.
• Gainers: Pacifico, Blue Moon, Busch Light; in retail, Pacifico, Guinness, Athletic NA, Angry Orchard, Goose Island.
• RTD velocity leaders: High Noon, Surfside, Sun Cruiser, Nütrl; scan data understates independents.

Spirits and whiskey

• MGP Q3 down on elevated barrel inventories; industry whiskey production cut sharply.
• SipSource outlook: spirits –~4% per quarter into 2026; tequila least bad, Cognac/brandy lag.
• Whiskey barbell: entry level soft, premium more resilient; flavored whiskey, rye, single-malt pockets of growth.

Innovation and portfolio

• New-item dollars –21.6% YTD; SKUs –41% vs 2023. Fewer, smaller hits.
• Supplier moves: Molson Coors impairment and reset; AB InBev execution + $6B buyback + Netflix tie-up.

Policy and trade

• TTB shutdown halts labels/permits/formulas; expect bottling and launch delays.
• SCOTUS tariff case keeps import pricing volatile into 2026.
• Hemp beverages: split between prohibition vs regulation; push for parity frameworks.
• Whiskey trade asks: zero-for-zero tariffs, fix Canada provincial impacts.

Route-to-market and operations

• Southern Glazer’s acquires AB’s NYC distribution; faster RTD execution expected.
• NY stricter DWI law; Hooters founders reacquire brand; speed-serve “Green Tea Shots” partnership.
• Grocery steady in Southeast; value channels cautious; watch SNAP and holiday elasticity.

Supply correction

• California vineyard removals ~7%; further right-sizing likely.
• Record KY barrel stocks; selected capacity and labor reductions in whiskey supply chain.

Action items

• Tighten code and inventory, bias to proven RTDs and value-leaning light lagers.
• Hedge tariff/TTB timing in Q4 plans; build alt scenarios for imported pricing.
• Prune low-repeat innovation; double down on formats with velocity in independents and on-premise.

Beer reset: Category volumes down; fall price hikes muted. AB InBev gains share via Ultra/Busch Light; others softer.

Spirits bifurcation: Prepared cocktails and agave hold up; core spirits ex-RTD contract; promo depth rises to chase value shoppers.

Wine still correcting: Retail and DTC negative; bright spots in Sauvignon Blanc, rosé, sparkling; Champagne improving sequentially.

RTD scoreboard: Cutwater surges; spiked tea pops (Surfside, Sun Cruiser); hard seltzer continues to decline.

Company moves: Boston Beer tightens margins and leans into RTD/cider; MGP beats and refocuses; Brooklyn Brewery taps USB for U.S. sales; Fedway expands into beer.

Craft stress: U.S. craft distillery count down sharply; distribution and capital constraints bite.

Hemp THC goes mainstream: Circle K expansion plus big-box pilots put intoxicating hemp in direct competition with alcohol at the cold box.

Policy watch: Canadian warning labels debate, NC privatization talk, multistate AGs vs hemp loopholes, tariffs, and tequila label lawsuits.

Consumer lens: “Fewer, better” occasions; Sober October participation; early GLP-1 evidence suggests slower pacing and lower cravings.

THE CRISIS

• Only 54% of US adults drink alcohol (record low)
• Beer volumes down -4.5% YTD; wine sales back to 2011 levels
• Diageo cut forecast to +0.9%; Pernod Ricard to -10.4%
• Brown-Forman cut 650 jobs; Molson Coors cutting 400 roles
• Kentucky bourbon barrels at all-time high: 16.1 million (oversupply crisis)
• Primary driver: Cost-of-living pressure, not just wellness trends

THE WINNERS

Non-Alcoholic: $925M in sales, +22% YoY (Athletic Brewing +57%)

Mexican Imports: Constellation hit 20.56% beer share; Pacifico +25%

Spirit RTDs: Only growth category in 2024; now 8% of total servings (vs 4% in 2019). Boston Beer's Sun Cruiser hit ~3M cases in Q3; Surfside grew 362% and is suing AB InBev over trade dress

Hemp/THC Beverages: Minnesota stores report THC drinks offsetting wine/beer declines, especially with women 25-40 replacing weeknight alcohol

REGULATORY CHAOS

• 86% of federal TTB furloughed - label approvals suspended during peak season
• Previous shutdown created 5-month backlogs
• Congress may close Farm Bill loophole on hemp-derived THC beverages
• California DTC spirits pilot starts Jan 1, 2026

2026 OUTLOOK

Efficiency Over Growth: Heritage Distilling going asset-light; Eagle Rock using AI for +9% gross profit

Supply Challenges: California grape crush at 2.9M tons (20-year low), expected to drop another 400k tons

Innovation Focus: Higher ABV RTDs (12%+), Mexican import extensions, non-alc expansion

KEY TAKEAWAY

The industry is bifurcating: value brands and alternatives (non-alc, RTDs, THC) win while the premium middle collapses. The question: Is this permanent decline or transformation into "beverage" with alcohol as just one functional option?

Companies Mentioned: Diageo, Pernod Ricard, Brown-Forman, Molson Coors, AB InBev, Constellation Brands, Boston Beer, Athletic Brewing, Surfside, RNDC

Data Sources: Circana, Gallup, NABCA, IWSR, NIQ, Jefferies

Moderation & value: Only ~54% of adults drink; shoppers gravitate to sub-$20 and trimmed craft lineups.

RTDs surge: RTD share +420 bps YoY; Cutwater standout; core spirits soften on price/mix.

THC beverages: Target MN pilot launches; Ohio pauses intoxicating hemp; CA channels intoxicating hemp to cannabis by 2028.

Route-to-market: NBWA emphasizes distributor independence; SGWS–Provi settlement legitimizes digital ordering.

Capacity pinch: Manna/NorCal plant auctions tighten co-packing; plan longer lead times.

Wine stress: CA oversupply + Canada export collapse; producers cut price points and replant acreage.

TWE transition: Expect promo noise and sporadic outages as inventory resets.

People & deals: Duckhorn employee ownership; BrewDog cost actions; Westward sale; Napa asset trade.

Policy watch: CA DtC spirits pilot for 2026; AL bailment fee +$0.28/case; IL craft license; MI tightening THC rules.

Cognac supply: BNIC to remove 10–13.5k ha; potential for firmer US wholesale pricing.

Beer demand stays soft (BPI 28) while value tiers and FMBs hold up. Whiskey faces mounting stress—Uncle Nearest enters receivership—though potential Scotch tariff relief could lift holidays. Prosecco leads sparkling growth. The TTB shutdown freezes approvals, and hemp rules tighten across key states. Cargo thefts rise, copacker closures hit production, and Gen X drives CPG spend.

Focus: protect margins, push RTDs and accessible sparkling, and prep for regulatory delays.

Thank you for joining us for the weekly recap—don’t forget to subscribe to our daily newsletter at subscribe.drinxai.com.

• Category Trends: Spirits and wine continue to cool, while beer marks its tenth straight monthly shipment decline. RTDs and select imports shine as bright spots.
• Consumer Signals: Costco’s comps slow, renewal rates dip, and University of Michigan sentiment plunges — reflecting a more cautious shopper.
• THC Beverages: Explosive growth in Minnesota and expanding portfolios from Untitled Art and Birdie meet mounting regulatory pushback in Illinois and Washington.
• Corporate Moves: Sazerac acquires Western Son Vodka, Buffalo Trace fills its nine-millionth barrel, Brown-Forman announces a $400M buyback, and Far Niente installs a new CEO.
• On-Premise & Retail: Hooters exits Chapter 11 with a new franchise model, casual dining pivots to $10 meal value strategies, while Costco trims holiday assortments.
• Supply Chain & Risk: California’s 2025 winegrape crush projected at 2.4M tons; Napa’s Pickett Fire threatens $65M in grapes; and a $1M whiskey theft highlights logistics vulnerabilities.
• Regulation & Compliance: TTB shutdown contingency plans could stall approvals, Maine cuts off DTC shipments, and a California bribery case underscores three-tier compliance stakes.
• Premium Spirits Reset: IWSR data shows U.S. status spirits down 5% in 2024; Cognac declines, Scotch steadies, and high-end agave shows signs of peaking.

From shifting consumer sentiment and supply chain risks to major acquisitions and regulatory hurdles, this week’s episode delivers the essential insights beverage leaders need to navigate a challenging but opportunity-filled landscape.

Key highlights from September 22–26, 2025:

1. 📉 Category trends: Beer volumes slide despite NFL kickoff; spirits growth cools, while RTDs and cider outperform.
2. 🥤 RTD momentum: Spirits-based cocktails +22%, wine-based +27%; Cutwater surges, while High Noon slows.
3. 🍺 Beer shake-up: Michelob Ultra overtakes Modelo Especial as America’s top beer across retail and on-premise.
4. 🥃 Spirits strategy: Tito’s acquires LALO Tequila, fueling the tequila arms race against Diageo and Brown Forman.
5. 🍷 Wine pressure: Shipments and DTC sales drop despite premium price strength; bulk oversupply weighs on outlook.
6. 🛒 Retail & distribution: Grocery traffic grows; C&S–SpartanNash merger reshapes shelf access for suppliers.
7. 🏢 Corporate moves: Molson Coors names Rahul Goyal CEO; AB InBev partners with Netflix; Constellation trims guidance.
8. ⚖️ Policy & regulation: Maryland cracks down on hemp-derived intoxicants; Kentucky liquor liability ruling raises risk; Tennessee hemp lawsuit challenges three-tier restrictions.
9. 👥 Consumer behavior: Gallup shows U.S. alcohol participation at 54%—lowest in 90 years; Millennials drive on-premise volume, Gen Z favors flexible drinking.
10. 💰 Capital & product moves: Diageo pauses U.S. whiskey production; Zachys’ Rothschild auction nets $11M; Trump Vodka revival teased.

This week’s recap highlights the push-pull between premiumization at the top and value-seeking at the base, showing how brands, distributors, and retailers are adapting to an evolving consumer landscape.

We'll explore the paradox of craft beer, which is struggling in its traditional grocery channel but finding surprising growth in convenience stores. Discover which brands like New Belgium's Voodoo Ranger and Sierra Nevada's Hazy Little Thing are thriving and how strategic price cuts are reversing trends for others. Meanwhile, we look at why large suppliers like Constellation Brands are facing a tougher outlook, with revised guidance pointing to softer sales and margin pressures from factors like aluminum tariffs.

Next, we uncork the challenges in the wine industry. While direct-to-consumer bottle prices are hitting record highs, shipment volumes are plummeting. We'll discuss California's bulk wine surplus and why, despite this, creating affordable new brands to attract value-conscious consumers remains a major hurdle.

Finally, we'll cover the big strategic moves in spirits. Hear about Tito’s first-ever acquisition of the fast-growing LALO Tequila and what it signals for the industry. We also touch on major distribution shifts and key executive appointments shaping the commercial landscape for the holiday season and beyond