Just to be clear, most everyone in the wine & spirits industry is hurting. Okay, besides one or two outliers maybe, but my point is: it’s not just you, your operation, your brand. These days, it just sucks for everybody. From suppliers to importers, wholesalers, retailers, bars, restaurants - the default reaction to the question “How is business?” usually is “Pretty good.” After about four seconds of digging, one finally explains that things are “complicated,” the market is “soft,” cash flow is “tight,” sales are “not strong,” etc. There is no laughing one’s way to the bank: people want to be healthier (I am one of them, and most everyone I know is on that bandwagon), customers drink less, spend less on the alcohol they purchase, it feels like everything costs a million dollars even though inflation on paper remains okay, lots of on- and off-prem are hurting (some are doing okay because of the rapport with the clientele they might have developed, or the work they put in appearing “special” to some degree while the next-door business is dead), the U.S. wholesale landscape is in shambles (on the artisanal front, inventories remain low since 2023, lots of orders are the exact reflection of what the company just sold, some wholesalers have been bought out, a good amount are looking at the suppliers they feel they need to part ways with), etc. Working 30% more to make less money is the new normal. It is hard for everyone. (Will it last? Yes, likely.)
Nick Nistico
9mo
I agree that the industry is hurting, but much of that pain is self-inflicted. There is no reason a well vodka cocktail should cost $15+, no reason an entry level glass of wine should be over $10, and no reason a beer should ever approach $9. Happy Hour should feel like a thank-you to the guest, not a $2 discount on yesterdays punch. Somewhere along the line, the business got ahead of itself and forgot who it’s really serving. The health-conscious, low-sugar, lower-ABV movement didn’t just “pop up” five years ago! It’s been building for decades. Nobody listened and instead the industry ignored the signals and doubled down on inflated pricing, vanity brands, and distribution-driven growth at the expense of loyalty, experience, and accessibility. American wine production is abundant, but we still can’t consistently sell a quality California red blend DTC for under $10. That says everything. If a correction is coming and I believe it is! It’s long overdue. When the dust settles, hopefully what’s left will be an industry that respects the consumer again and values long-term brand health over short-term margin grabs.
Well said and accurate, but amongst the chaos and those that struggle there will also be those that innovate, adapt, and find new opportunities. We work harder now to be the leaders in the market place in the years ahead.
Same in France and even more in Germany Nicolas Palazzi. On-trade point of sales have been experiencing a steady decline in customer numbers over the last 5 years, and we are witnessing a worrying wave of bankruptcies. And at the same time Boutique retailers are struggling for the most of them with high and a lighter avarage basket. The only way to keep business flowing is through a succession of "entertaiment" initiatives. As a result, the entire value chain and all the intermediary players are impacted, with effects not only on sales volumes but also, of course, on commercial margins. It is to be hoped that the sector's slimming phase will allow different routes to market to emerge. We hope that these constraints will be beneficial to the creativity of our teams, from producers to the point of sales, enabling consumers to become more critical of the quality of the products they consume, because they are consuming less!