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