EDITOR ' S NOTE

One thing is for sure as we wrap up 2025: We have firmly left behind the Covid-era boom times. Gangbusters sales during the pandemic, driven by overstocking and panic buying, have given away to a corrective period for the beverage alcohol industry. This was not an easy year.

How do we properly define this industry’ s pullback? Through one lens, it makes sense given the overheated market during Covid. When sales suddenly— and artificially— jump 40 % amidst unprecedented times, a subsequent correction in the opposite direction should surprise nobody who understands how markets work. If you zoom out and look at overall industry sales before and after Covid, you will see a line of steady updrift, interrupted by a sharp spike up and then down from the pandemic. Moderate growth remains in place.

Unfortunately, some companies believed that the unrealistic sales bump from Covid would last longer. We are not here to name names, but anyone following our industry knows which companies got caught overexpanding and overestimating future demand. In the year to come, we expect more news of brands coming down to earth and scaling back. This is part and parcel to a market correction.

No discussion of the post-pandemic pullback would be complete without mention of Gen Z. The drinking habits of our youngest LDA generation have been dissected to death at this point, including in the pages and podcasts of this very publication. We will spare you the finer details this time around, but do want to reiterate one point. Just because Gen Z does not drink as much now does not mean this is their permanent preference. Remember that this generation was coming of age as young adults when Covid hit. The pandemic delayed their professional growth at a critical early juncture. Thus, we see Gen Z as having more of a money problem than a drinking issue. As they recover professionally, and move up in their careers and earn better, we think there’ s a good chance they splurge on affordable luxuries like alcohol.

Lasty, the other big picture to keep in mind is the natural makeup of cyclical markets. A healthy pullback like our current situation implies growth again on the other side. When we reach the bottom is anyone’ s guess. Perhaps it has already happened. But America’ s historical drinking culture will not disappear or shrink significantly from just two disappointing years. At some point, sooner than later, the arrow will point in the other direction once again. In the meantime, we wish you all a happy and prosperous new year on behalf of everyone at Beverage Dynamics. Cheers!

Beverage Group Vice President Jeremy Nedelka Tel: 763-383-4413 email: jnedelka @ epgacceleration. com

Editor, Off-Premise Kyle Swartz Tel: 763-383-4447 email: kswartz @ epgacceleration. com

Trade Managing Editor Krystina Skibo Tel: 763-383-4419 email: kskibo @ epgacceleration. com

Contributing Editors Melissa Dowling, Marnie Old, Tom Shay

National Account Director Debbie Rittenberg Tel: 763-383-4455 email: drittenberg @ epgacceleration. com

Associate Managing Art Director Nicole Siewert

Senior Product Manager, Data & Insights Marina Velez Tel: 763-383-4453 email: mvelez @ epgacceleration. com

List Rental Kris Grauer email: kgrauer @ npsmediagroup. com Tel: 203-822-7933

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Sr VP / Audience Development Joanne Juda-Prainito Corporate Operations Director Bernadette Wohlman CEO Marion Minor

BRAND ACCELERATION

Beverage Dynamics is published by EPG Brand Acceleration Editorial and executive offices at 7760 France Avenue South, Suite 810, Bloomington, MN 55435.

Kyle Swartz Editor, Off-Premise

4 Beverage Dynamics • Winter 2025 www. beveragedynamics. com