Summer Wine & Spirits Preview: Near-Term Wine & Spirits Headwinds Unabated, RNDC Disruption, Premium Outperforming
Earlier today, we hosted a virtual event with Michael Manzo, EVP and CFO of Winebow — a national premium wine and spirits distributor. The summer outlook for wine and spirits remains challenging, with no meaningful improvement expected through the summer. Industry data suggests wine volumes are down roughly 8%, with spirits declining mid-single digits. The collapse of RNDC has caused significant distribution disruption for many brands. Younger consumers are drinking less on a per-occasion basis, with fairly stable occasions, while tequila and agave spirits remain pockets of strength and lighter whites & rosés outperform heavier reds.
Key Takeaways:
Outlook remains challenging with no near-term inflection. Wine volumes are down roughly 8% year over year and spirits 4 to 5% according to WSWA SipSource data. Winebow’s premium portfolio is relatively insulated but not immune, while sub-$10 wine is falling double digits. .
Consumers seem to be drinking less per occasion, but spending on better. Occasions appear stable — he noted restaurants and bars remain relatively full — but per-occasion consumption is falling across all age groups, with younger consumers showing the sharpest declines. Typical channel anecdotes are that adults are moving from three cocktails to two, or from an at-home bottle of wine to something less. The bright spots are ultra-premium ($40 and above), tequila and agave, and lighter whites and rosés, consistent with a less-but-better consumption pattern. Notably, GLP-1 usage is viewed as part of a broader health-consciousness trend rather than a standalone driver.
RNDC’s collapse is the most significant structural shock in a generation. The unravelling of the second-largest U.S. wine and spirits distributor caught the industry off guard and has caused widespread distribution disruption, particularly for smaller and mid-sized producers. The fallout may ultimately remove some supply capacity from the market, but it will not resolve the broader oversupply problem on its own.
THC regulation is a watch item, not yet a tailwind. Federal regulation, when it arrives, could be positive for established distributors who already have the trucks, relationships, and infrastructure. Mr. Manzo drew a sharp contrast between the known, regulated world of wine and spirits and the current patchwork of state-level THC frameworks — noting the absence of any federal equivalent to the TTB for labeling and liability. That said, the timeline and legislative path remain highly uncertain.
Overall, we remain optimistic for the U.S. alcohol market entering summer 2026 – despite clearly cautious recent comments from industry leaders. We note stable occasions, consumers preferring more premium brands, and retailers featuring them more often as positive long-term indicators. We think transient headwinds like oversupply, affordability & pricing are driving recent declines more than any long-term attitudinal shift. We continue to see the rationale for M&A amidst undemanding valuations and see the widely reported interest from multiple companies in Brown Forman as a taste of things to come.