TRIP REPORT argued Lester Jones , VP , analytics and chief economist , National Beer Wholesalers Association . “ We have this narrative that people are not drinking , but they are drinking , just the occasions have become more diverse .”
“ There may be more drinkers based on the math , but how much are they drinking , and how often ?” replied Danny Brager , an industry consultant and former SVP of beverage alcohol practice at NielsenIQ .
“ Historically , total alcohol remains 2.5 ethanol gallons per year per person in America ,” Jones responded . “ These narratives like people aren ’ t drinking , they stick with us , but the data doesn ’ t necessarily back this up .”
On the economy , Jones said , “ This is the ‘ Waiting for Godot ’ recession . We ’ re waiting and waiting and it never came . The reality is that real wages have kept up with inflation .”
The panel tackled the troubling topic of retail inventory declines .
“ During Covid , retailers and wholesalers had elevated assumptions of future sales , so their inventories filled up and then inflation slowed down sales ,” Jones said . “ There ’ s too much stuff stuck in the middle now that ’ s not coming through .” When might this correct ? “ I think we ’ ll see a correction by the end of next year , and even that may be too soon ,” Brager said .
Surveying the industry at large , Brager added , “ Dollar sales are doing better than volume , because people are still trading up . But volume is still down . I haven ’ t seen numbers from 2024 that look much better , so I ’ m still concerned . 2024 is still a difficult environment .”
Spirits like tequila and American whiskey are doing better , while beer and especially wine have trended in the other direction . The recent meteoric rise of ready-to-drink beverages appears to be leveling off to merely + 14.7 % growth on a month-to-month basis .
“ There are now 500 RTD brands ,” Brager said . “ There were less than half of that in 2020 . There ’ s lots of churn in this category .”
NABCA CEO Neil Insley with Robert Hall , Ron Insana , Tiffany Clason and Jeremy Shepherd .
Nevertheless , “ RTDs are now number two by volume in the spirits category [ after vodka ],” he added , “ and High Noon is now number one in the category , above Tito ’ s .”
Nonalcoholic products are up 35 % in dollar sales , year over year , Brager reported . Of people drinking these products , 90 % also consume alcoholic beverages . Perhaps where post-pandemic inflation remains the most entrenched is on-premise . “ Wholesale costs and labor costs are up 30 % since Covid ,” said Chad Moutray , VP , research and knowledge , National Restaurant Association , during the panel Retail Resilience . “ We ’ re feeling that on the bottom line , and so is the consumer . I think there is some sticker shock going on .” The pandemic also pushed more people towards contactless forms of payment . “ Lots of restaurants now say that swipe fees are the biggest expense they have ,”
Moutray said . “ Everyone post-Covid only pays with electronic payments .” Altogether it remains a trying environment for bars and restaurants . “ On-premise has not yet recovered to where it was pre-Covid ,” said Gary Cohen , www . stateways . com Fall 2024 • StateWays 7