That’s the conclusion of bw166, and what it has to say about the new normal should disturb a lot of bev/al execs at both the wholesaler and supplier levels.
Take, for instance, beer. Superficially, beer is up 1.9%, about 107.2 million barrels in the first half from a year earlier. “The reality is that the total growth can be attributed to imports from Mexico while the cumulative mix of all other sources and types is flat. Looking at Mexican Beer, Constellation is the key driver of these trends. The Compound Annual Growth Rate (CAGR) for Mexican Beer from the first half of 2019 to the first half of 2022 is 6.0% which is a reasonable trend line adjusting for the disruptions noted above. Consumer spending for Beer Off-Premise in the first half was $38.9 Billion, a 4.4% CAGR from the first half of 2019. Consumer spending for Beer On-Premise in the first half was $30.1 Billion, a 4.5% CAGR from the first half of 2019.”
Wine shipments in the first half are down 0.7%. But, again, it’s not quite what it appears to be. bw166 says the “key drivers of the decline are Flavored Wine Beverages and Vermouth. Excluding these types, wine shipments are up over 3.0% in the first six months. Consumer spending for Wine Off-Premise in the first half was $26.7 Billion, a 4.3% CAGR from the first half of 2019. Consumer spending for Wine On-Premise in the first half was $15.0 Billion, a 3.7% CAGR from the first half of 2019.”
As for spirits, well, spirits were up a spirited (sorry, I couldn’t resist) 11.1%. The largest drivers of this growth are Tequila and RTD Cocktails. Consumer spending for Spirits Off-Premise in the first half was $26.9 Billion, an 8.8% CAGR from the first half of 2019. Consumer spending for Spirits On-Premise in the first half was $24.0 Billion, an 8.4% CAGR from the first half of 2019, bw166 says.
For the full year, bw166 projects “Beer volume shipments will be flat, Wine will be down 2%, but excluding Wine Flavored Beverages and Vermouth, Wine shipments will be up 1%, and Sprits shipments will be up 4%. We see consumer spending on beverage alcohol growing at 4.5%, slightly lower than the CAGR since 2019 due to the slowing economy.”