Wine and Distilled Alcoholic Beverages

SIC 5182

Companies in this industry

Industry report:

This category includes establishments primarily engaged in the wholesale distribution of distilled spirits, including neutral spirits and ethyl alcohol used in blended wines and distilled liquor. The product range includes bottled wines and spirits, brandy and brandy spirits, cocktails, liquors, wine coolers, and wines.

Industry Snapshot

According to the U.S. Census Bureau, there were 2,121 wine and distilled alcohol beverage wholesalers in the United States in 2009. Together these establishments employed 73,114 people who earned a total annual payroll of around $4.7 million. Approximately 63 percent of the firms were small, employing fewer than 20 workers, although the few larger companies accounted for the majority of revenues. The value of the industry in the United States in 2011 was estimated at $64 billion.

Background and Development

During the middle and late years of the first decade of the 2000s, the number of wineries increased and the number of wholesale distributors for smaller wineries became fewer as they consolidated with the larger wineries. An abundance of brands brought increased competition for wineries and distributors. There was an overall trend among small wineries to ship direct as the large distributors carried more brands and devoted less attention to selling individual brands. Wineries were also taking on more sales and marketing responsibilities as those traditional roles were also diminishing among distributors. Logistically, however, distributors continued their role as the second tier in the three-tier system of U.S. wine and alcoholic beverage distribution.

Despite the economic recession of the late years of the first decade of the 2000s, wine continued its upward swing in popularity in the United States. However, the wine industry was not unaffected by the economic downturn, as consumers spent less on eating out--and drinking--and stores replaced wine displays with lower cost products to entice budget-conscious customers into their stores.

In the late years of the 2000s, wholesale distributors of wine continued a decade-long battle across the United States against wine retailers who were lobbying to change state regulations governing distribution. Primarily at issue was the ability of wine dealers to distribute their products to consumers directly across state lines, particularly based on direct-to-consumer Internet sales. In defense of wholesalers' necessary position in the supply chain, Wine & Spirits Wholesalers of America President Craig Wolf noted in 2009, "The sale of wine and spirits from the supplier directly to the retailer would significantly alter the economies of scale and the scope of the current safe and efficient distribution system. Costs would increase for all participants currently doing business in the three-tier system and consumers would suffer as a result of fewer product choices and less convenience."

For the most part, the courts were upholding the wine wholesalers' position, giving only slight ground to those arguing for direct marketing of wine and other alcoholic beverages. For example, in February 2008, a U.S. District Court in Arizona refused to uphold a plaintiff's claim as to the unconstitutionality of Arizona's state laws that require the face-to-face sale of wine and limit direct distribution of wine to certain classes of wineries (i.e., small wineries, which may only distribute in certain quantities). The trade association Wine & Spirit Wholesalers of America continued to lobby for legislation that would benefit the industry in the early 2010s.

Current Conditions

According to a report published in Wines & Vines in January 2012, the United States became the world's largest wine-consuming country in the world in 2010, and in 2011 the market grew another 4.5 percent, continuing an upward climb that began in the early 1990s. In 2011 Americans consumed an estimated 345 million cases of wine, one-third of which was imported. U.S. exports also grew that year and were worth $1.2 billion. The growth in the market was attributed to "an increasing role for wine in Americans' lifestyles and media, plus a staggering diversity of wine choices available to consumers."

Competition within the industry was heating up with the increased demand. According to Jon Fredrikson of Gomberg Fredikson & Associates in Western Farm Press, "It has been a marketing free for all in the market last year [2011]." The rise in demand was also leading to a shortage of wine grapes, which was expected to raise prices into 2012. Although the overall outlook for the industry was good, a 2011 report from market research firm IBISWorld warned that "The growing popularity of direct-to-consumer and Internet sales will challenge the [wholesaling] industry's traditional role." Increased regulations were also expected to be a factor into the mid-2010s.

Industry Leaders

In 2011 the top 50 companies in the industry accounted for about 75 percent of revenues. The industry leaders included RNDC (Republic National Distributing Co.), Southern Wine & Spirits of America, The Charmer-Sunbelt Group, and Glazer's Wholesale Drug Co. RNDC was formed when National Distributing Company, Inc., of Atlanta, Georgia, combined most of its operations with Republic Beverage. By the early 2010s, the firm generated annual sales of around $4.5 billion with operations in 20 states. Southern Wine & Spirits of America in Miami, Florida, recorded 2011 sales of $946 million. Representing more than 1,600 distributors globally and operations in 35 states, the firm shipped more than 90 million cases of wine and spirits annually. The Charmer-Sunbelt Group, based in New York City, operated through ten subsidiaries and eight joint ventures and had sales of $3.7 billion that year. Dallas, Texas-based Glazer's Wholesale Drug was founded in the early 1900s and by the early 2010s also saw annual sales in the billions, with 2011 figures at $3.0 billion.

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News and information about Wine and Distilled Alcoholic Beverages

ODJ U.S. Wholesale Trade-STATS-Seasonally Adjusted Levels.
FWN Select; April 8, 2002; 505 words
...5481 5406 5312 Beer, Wine and Distilled Alcoholic Beverages...10596 10771 Beer, Wine and Distilled Alcoholic Beverages...96 2.03 Beer, Wine and Distilled Alcoholic Beverages...
Inventory Valuation Adjustment by Industry
Survey of Current Business; November 1, 2016; 700+ words
...products wholesalers -901 -36 61 Petroleum and petroleum products wholesalers -1,219 2,621 62 Beer, wine, and distilled alcoholic beverages wholesalers -753 -172 63 Miscellaneous nondurable goods wholesalers -1,830 -336 64 Nonmerchant...
Real Manufacturing and Trade Sales, Seasonally Adjusted at Monthly Rate [Chained 2009 Dollars, 1997 Forward, NAICS]
Survey of Current Business; August 1, 2016; 700+ words
...allied products wholesalers 8,453 48 Petroleum and petroleum products wholesalers 37,532 49 Beer, wine, and distilled alcoholic beverages wholesalers 9,711 50 Miscellaneous nondurable goods wholesalers 17,267 51 Retail trade industries...
Implicit Price Deflators for Manufacturing and Trade Sales [Index Base 2009, 1997 Forward, NAICS]
Survey of Current Business; November 1, 2016; 700+ words
...allied products wholesalers 122.994 48 Petroleum and petroleum products wholesalers 172.151 49 Beer, wine, and distilled alcoholic beverages wholesalers 111.316 50 Miscellaneous nondurable goods wholesalers 115.716 51 Retail trade industries...
Change in Book Value by Industry
Survey of Current Business; November 1, 2016; 700+ words
...products wholesalers -1,012 1,896 61 Petroleum and petroleum products wholesalers -188 904 62 Beer, wine, and distilled alcoholic beverages wholesalers 1,328 196 63 Miscellaneous nondurable goods wholesalers 3,872 -2,712 64 Nonmerchant...
Change in Private Inventories by Industry
Survey of Current Business; November 1, 2016; 700+ words
...allied products wholesalers -1,913 61 Petroleum and petroleum products wholesalers -1,407 62 Beer, wine, and distilled alcoholic beverages wholesalers 575 63 Miscellaneous nondurable goods wholesalers 2,042 64 Nonmerchant wholesale industries...
Real Manufacturing and Trade Inventories, Seasonally Adjusted, End of Period [Chained 2009 Dollars, 1997 Forward, NAICS]
Survey of Current Business; August 1, 2016; 700+ words
...wholesalers 9,444 9,820 48 Petroleum and petroleum products wholesalers 15,548 16,070 49 Beer, wine, and distilled alcoholic beverages wholesalers 13,458 13,463 50 Miscellaneous nondurable goods wholesalers 26,847 26,208 51 Retail...
Change in Real Private Inventories by Industry
Survey of Current Business; August 1, 2016; 700+ words
...allied products wholesalers -1,554 61 Petroleum amd petroleum products wholesalers -791 62 Beer, wine, and distilled alcoholic beverages wholesalers 522 63 Miscellaneous nondurable goods wholesalers 1,742 64 Nonmerchant wholesale industries...

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