Regulation & Policy

• 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.

Show notes

• 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.

Market pulse

• 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.

At-home shift widens: Alcohol-at-home +0.3% vs away-from-home +4.1% YoY; on-premise traffic and velocity remain pressured.

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 US beverage alcohol industry faces its most dramatic transformation in decades. Consumer participation hit record lows, major suppliers are slashing forecasts and workforces, yet clear winners emerge: non-alcoholic beverages up 22%, RTDs becoming the growth engine, and hemp-derived THC drinks creating new competition. We break down October 2025 market data to understand what's really happening.

• 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

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

• 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

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

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

Market pulse: Bevalc dollars down, beer & wine weakest; spirits growth concentrated in RTDs; NA beer resilient; ABI steady share; Modelo cools.

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.

US Market Intelligence | Oct 6–10, 2025

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.

In this week’s U.S. beverage industry audio brief, we cover the critical developments shaping the alcohol market as Q4 begins:

• 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.

This week’s beverage alcohol industry update covers the shifting dynamics across beer, wine, spirits, and ready-to-drinks as U.S. consumers lean into value, convenience, and premium light options.

Key highlights from September 22–26, 2025:

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

In this episode, we unpack the September 2025 state of the U.S. beverage market, where mixed signals are the new normal.

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