WSWA Sees Industry 'Finding Its Footing'

Wine & Spirits Wholesalers of America admits that spending on wine and spirits has declined 5% to 6% from a year earlier. It even acknowledges "that may sound concerning at first glance."

But don't worry – that decline represents stability, it says. "Earlier in the cycle, sales were dropping unevenly and sometimes quickly. More recently, those declines have leveled off into a consistent, predictable range. In simple terms, the market appears to be finding its footing," the trade group says.

Several everyday factors are shaping how consumers shop for wine and spirits.

Many households remain value-conscious, weighing higher prices and broader economic uncertainty against everyday spending. That often means buying fewer items, choosing smaller quantities, or looking for better deals. WSWA says, and we believe it is correct in that analysis.

However, we believe WSWA is at least a year early in saying the industry is stabilizing. The primary culprit is the "K-shaped" economy. To be sure, high end consumers – think, for instance, hedge-fund proprietors – continue to be doing well and the last tax bill, restoring the State and Local Tax Deduction will give upper-income consumers in those states a leg up.

But, even upper-income consumers have reason to worry, and the 1% whose incomes are below $369,500 have even more reason to worry as the Iran War is driving up prices on basic components of everyday living from gasoline; oil, which is driving up the cost of growing and transporting food; fertilizer and plastic; jet fuel; mortgage and other interest costs. And just yesterday (4/27), the Wall Street Journal reported that many people seeking to trade in their vehicles are finding they still owe substantial amounts on their cars and trucks. Plus: Many investors fear we are on the verge of another financial crash.

Another important factor is timing. WSWA notes the industry is still comparing today’s sales to unusually strong demand from prior years—particularly during and just after the pandemic, when at-home consumption surged. As those elevated levels normalize, year-over-year comparisons naturally appear weaker.

Where Are Changes Happening?

Both places where consumers buy alcohol—stores and restaurants—are experiencing challenges, but for different reasons.

• Retail stores are seeing softer demand as at-home consumption settles back to more typical levels after pandemic highs. 
• Bars and restaurants are experiencing shifts in customer traffic, with many consumers being more cautious about discretionary spending like dining out. 

These patterns reflect broader consumer behavior: balancing social experiences with tighter budgets.

What’s Happening Across Price Levels?

Not all products are performing the same way. 

Higher-end products still show pockets of strength, but the long-running trend toward premium purchases has slowed. Increasingly, consumers are looking for value, whether that means choosing familiar brands, smaller formats, or lower-priced options.

This shift doesn’t mean premium products are disappearing—it simply reflects a more selective approach to spending.

Stability Is the Key Story

Even though overall sales remain negative, the consistency of recent results is an encouraging signal. 

Month-to-month performance is no longer dropping sharply. Instead, results are holding within a narrower range, WSWA says. That suggests much of the market adjustment following the pandemic surge may already be reflected in current numbers, it adds.

We'll believe the bottom in the decline has been reached when the negative numbers reach about 1% to 1-1/2%.