A huge alcohol company is dumping most of its wine brands as sales sag globally
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Bitter with a harsh mouthfeel… The wine industry’s been getting corked. One of the world’s largest booze companies, Pernod Ricard (parent of Absolut Vodka, Jameson Whiskey, and Kahlúa), announced yesterday that it was selling the bulk of its wine brands to focus on spirits and champagne. The bev giant said that the 10 brands it’s offloading, to Australian Wine Holdco, sell about 10M cases/year. Sales of the brands (including Jacob’s Creek and Campo Viejo) fell 7% in Q1 as wine consumption continues to oxidize.
Flavor profiles: Wine sales made up just 4% of Pernod Ricard’s $13B in sales last year. Last week, the company launched a whiskey-focused US unit, and earlier this year it partnered with Coke on a ready-to-drink Sprite cocktail.
Wining down… Wine’s been getting buried, and we’re not talkin’ earthy aftertaste. This month, booze biggie Constellation Brands also reported dry wine sales. The company’s non-beer sales fell 7% in the quarter, and it said it was considering offloading some of its wine holdings. Wine sipping has been falling for years, hitting a 27-year low last year (and production was at its lowest level in over six decades). While newer drinks like spiked seltzers and ready-to-drink cocktails gain buzz, wine can take years to produce and makers can’t pivot as quickly to trends. Meanwhile, higher costs, increased competition from marijuana, and growing awareness about the health risks of drinking have hurt alcohol sales.
Alcohol’s in a soul-searching stage… This isn’t wine’s problem alone: US beer drinking fell to its lowest level in a generation last year, and Molson Coors found that 30% of Gen Z doesn’t drink at all. As habits shift, established bev brands are struggling where nonalcoholic startups are thriving. This month, booze-free-beer maker Athletic Brewing doubled its valuation to $800M, and it’s outsold sober offerings from Heineken and Budweiser in US stores.