Welcome back to the BevNET spirits newsletter! This week we’re digging into the biggest drivers of change for bev-alc in 2025. 

What insiders are reading: Check out a chat with Brother’s Bond on their recent investment and how to navigate supply chain costs in 2025.

Thanks for reading! 

-BevNET spirits editor, Ferron Salniker

From alcohol’s health halo dimming to will-they-or-won’t-they tariff, there’s been no shortage of challenges in spirits recently. But we polled some smart people to get an overview of the major trends that will shape the industry in 2025, including some of the bright spots. 

Health and Wellness Fuels Policy Debates, And Gen Z

We’re in a new era of alcohol consumption, and it may not be forever, but this year we’re watching moderation trends as well as policy shifts. 

Trade groups are keeping eyes on the Dietary Guidelines process, the TTB’s potential new rules for nutrient and alcohol content labeling, as well as the calls for cancer risk warning labels (last week the WHO/Europe joined the choir). As for the latter, that kind of change in the U.S. isn’t likely to come to fruition anytime soon, but bev-alc lawyers have eyes on California and New York, often on the forefront of regulatory development. What to expect from the new Secretary of Health and Human Services, Robert Kennedy Jr.? That’s a “wild card” as one lawyer put it. Fun!

While Gen Z in particular doesn’t seem to need any reminders about their own health and well-being, nearly 30% also just don’t like the taste of alcohol, according to a survey by consumer research platform Attest. Which means there are still opportunities there through flavor innovation. And whether you are aiming to appeal to the youngest generation by offering budget-friendly or socially responsible or healthier products, just be genuine about it – faking the funk doesn’t fly (and you know they love that natty wine funk). 

Total Bev Aspirations Could Spark More M&A

Last year we saw investment activity focus on portfolio optimization: major strategics picked up RTDs and non-alc, while many global bev-alc companies shook out non-core brands. Mid-size spirit companies have also begun to take on the role as acquirers, like Uncle Nearest and Heritage Distilling. So what’s next? 

There are some expectations that strategics will look for deals in the functional wellness and adult non-alc (particularly RTD) spaces as they fulfill their total-bev aspirations and aim to make up low numbers for shareholders. 

Premiumization is still holding steady in some categories but the mid-tier may see more investment as well. 

And are celeb-backed brands hot-or-not to investors in 2025? Depends. As always, sustained success for any celebrity-backed venture still hinges on the brand’s intrinsic appeal. 

Read the rest of our forecast for 2025. 

Despite inflationary concerns, consumers continue to spend on-premise, according to a recent report from the Bank of America Institute. Analysts attributed the shifts to consumers drinking down their pandemic bar stocks or a shift to spending on experiences. Among Bank of America card users, Baby Boomers recorded the largest increase in spending at bars. Read more.

Constellation Brands is facing a federal securities class-action lawsuit from an investor who alleges the company shared false information about its positive outlook for its challenged wine and spirits division. Constellation’s beer division has long buoyed its wine and spirits division, and at issue is the company’s downward shift of its financial guidance during its earnings report last month. Read more.

We’re ashamed to be one of the media writing a boom or glut headline again, but here’s a focus on solutions. Ready-to-drink (RTD) cocktails may be one way through the bourbon glut, according to Bardstown Bourbon president Pete Marino. The contract distiller already sports a growing portfolio of owned brands, and is now getting crafty as it aims to tackle a challenge for the industry. Check out Bardstown’s plan.

If you work in the industry this headline is unlikely to be shocking, but we went through the FTC’s claims about SGWS so you don’t have to. The distributor has consistently charged independent retailers as much as 12% to 67% more than national and regional chains for the same products, according to newly unsealed redactions in the FTC’s price discrimination case against the distributor. Read what else the FTC is alleging and how SGWS responded.

Vodka maintained its lead in revenue and volume last year, but RTDs and tequila/mezcal are coming for the top spirit. Read some of the other key sales stats that popped up from the trade group's yearly debrief and how DISCUS plans to “level the playing field” for spirits.