**Key Themes This Week:**

- Broad-based U.S. volume declines across beer (-5.9% full-year shipments), spirits (-7% value), and wine (DTC -14% volume in OR/WA)

- Distribution tier structural contraction: Breakthru cuts ~500 jobs; RNDC shed 1,700+ in past year; Reyes in active talks for further consolidation

- RTD cocktails as the dominant growth engine: +7.1% dollar sales (NIQ), +35.2% value growth and +382 bps share gain (Jefferies)

- K-shaped consumer spending visible across every category and channel

**Major Earnings & Financial Results:**

- **Pernod Ricard:** H1 revenue €5.26B (-14.9% reported, -5.9% organic); U.S. sales -15% vs. consensus -13%; global headcount reduced by ~2,400

- **Molson Coors:** Q4 net sales $2.66B (-2.7%); U.S. depletions -5.1%; FY26 EPS guided -11% to -15% YoY — shares fell 7.4%

- **Heineken:** U.S. net revenue down high-single digits; U.S. volumes down low-teens; planning 5,000–6,000 global job cuts over two years

- **Treasury Wine Estates:** A$770.5M U.S. asset impairment; A$649.4M statutory loss; dividend paused

- **Suntory:** Alcohol sales -0.4% to ¥1.38T; pausing Kentucky Beam campus production through end of 2026

- **Brown-Forman preview:** Citi expects organic sales -3.6%, EPS $0.46 for fiscal Q3 (reports March 4)

**Distribution & Route-to-Market:**

- Breakthru Beverage: ~500 layoffs across FL, IL, CO and other markets

- RNDC: 1,700+ cuts in 2025; exited California; additional cuts in IN, WA, OR; Becle (Jose Cuervo) exited RNDC near-nationwide

- Reyes Beverage Group in "active discussions" with RNDC across six states + D.C.

- Hand Family Companies formed Sunset Distributing (Stone + Classic Beverage + Scout) in SoCal

- NBWA survey: Distributors expect beer to drop from 76% to 67% of portfolios within five years

**Wine Sector Distress:**

- Gallo closing Ranch Winery (St. Helena); 93 total jobs cut across five CA locations

- Trinchero listing Haystack (Atlas Peak) and Clouds Nest (Mt. Veeder) vineyards for sale

- Foley Family Wines closed Chalone Vineyard's Soledad facility; laid off entire winemaking staff

- Vineyard/winery transaction market projected at less than half of 2021's ~$3.5B volume

- DTC bright spot: $200+ Cabernet +14% value; $10,000+ bottles +28% YoY

**Strategic Moves & Deals:**

- Tilray signs five-year U.S. licensing deal with Carlsberg Group (Carlsberg, Kronenbourg 1664, others) effective Jan 2027

- Hotaling & Co. closing Pier 50 distillery; pivoting to import/brand-building model

- Stoli Group: founder Yuri Shefler steps in as interim CEO; Amber Beverage Group confirms loan default; U.S. ops and Kentucky Owl in bankruptcy

- Oregon Beverage Collective formed; Crux Fermentation acquired by Cascade Lakes owners (~40K barrels combined)

**RTD & Emerging Categories:**

- RTD cocktails: only growing major segment in NIQ data (+7.1% dollars); 36.2% of on-premise packaged volume

- Top RTD performers: Cutwater +114.7%, Surfside +223.5%, Sun Cruiser +349.5%, Buzzballz +41.8%

- Non-alcoholic beer: 5.4% of on-premise packaged share (+1.4 pts); 94% of distributors added NA suppliers in past year

- THC beverages: Indeed Brewing at 15–20% of volume, 25–35% of revenue; Scofflaw expects THC >50% of revenue

**Regulatory & Legal Updates:**

- **New York:** SB 9220 would allow liquor retailers to sell THC beverages (=5mg/serving); separate bill would allow grocery stores to sell wine and liquor

- **Iowa:** HF 2403 advances to end state liquor distribution monopoly (13-8 committee vote)

- **Maryland:** Legislation introduced to allow grocery beer and wine sales

- **Illinois:** Considering lowering BAC limit from 0.08 to 0.05

- **Kentucky:** HB 612 would add 4% license fee on top of 6%...

## SHOW NOTES

**Key Leadership & Corporate News**

- Constellation Brands CEO transition: Nicholas Fink succeeds Bill Newlands effective April 13, 2026

- Heineken announces 5,000-6,000 job cuts (7% of workforce) over two years; targets €400-500M annual savings

- AB InBev FY25 EBITDA at $21.2B; guides FY26 organic growth of 4-8%

- Coca-Cola consolidates Red Tree Beverages and BodyArmor under North American Operating Unit

**M&A Activity**

- E.&J. Gallo acquiring Four Roses Bourbon from Kirin for $775M

- Crimson Wine Group acquires Raeburn brand (~250K cases) from Purple Brands

- Carolina Premium Beverage and United Beverages NC merging to form 18M-case United Carolina Beverages

**Financial Distress & Restructuring**

- Uncle Nearest: $164M total debt; receiver alleges $30M revenue overstatement, unpaid taxes since 2018

- Stoli USA: Judge orders Chapter 11 trustees for orderly asset sale

- RNDC layoffs continue (~100 in FL, ~40 in TX); potential sale of 7 markets to Reyes Beverage Group

**Market Performance (4 weeks ending Jan. 31)**

- Total Alcohol: $7.2B (+0.6% dollars); 136M cases (-0.2% volume)

- RTD: +8.8% dollars, +3.0% volume

- Beer: +0.9% dollars, -0.4% volume

- Wine: +0.3% dollars, -1.4% volume

- Spirits: -2.8% dollars, -1.3% volume

- NA Beer: +7.0% dollars, +5.7% volume

**Wine Industry Reset**

- DTC wine: 5.4M cases, $3.7B in 2025 (down 15% volume, 6% value YoY)

- California vineyard removals: ~40,000 additional acres expected in 2026

- Average DTC bottle price: $56.78 (up 11%)

**Trade & Tariffs**

- US Scotch exports down 4% value, 9.2% volume in 2025

- Post-April tariff (10%): May-December shipments down 15% volume, 7% value

- Mexico tequila oversupply: ~500M liters unsold; agave prices collapsed from 30-32 pesos/kg to 2-5 pesos/kg

**Consumer Trends**

- Dry January: 88% adherence among participants; 17% overall participation (Gen Z 32%, Millennials 26%)

- Oral GLP-1 (Wegovy pill) availability in 2026 may accelerate medication adoption

- World Cup 2026: 58% plan to follow; 49% say beer will be drink of choice at bars/restaurants

**Regulatory Watch**

- Supreme Court case challenging Arizona's in-state retailer requirement for wine shipping

- New York grocery wine/spirits legislation gains momentum

- Chicago liquor tax changes effective March 1, 2026

- Heaven Hill defending Lunazul "100% agave" class action

**Key Takeaways**

1. Growth is increasingly mix-led—RTDs, NA, cider, and select imports carrying the market

2. Distribution restructuring is a first-order commercial variable affecting supplier strategy

3. Whiskey oversupply creating M&A opportunities and production adjustments

4. Wine's reset is structural—supply, DTC, and regulatory changes converging

5. Moderation is normalizing beyond January with potential GLP-1 acceleration

### Key Themes This Week:

- **RTD Revolution**: Ready-to-drink cocktails drove +17.1% volume growth; spirits excluding RTDs were -2.7% volume

- **Historic Milestone**: Spirits overtook beer in U.S. revenue share (42.4% vs 41.8-41.9%)

- **Consumer Caution**: Affordability-first behavior intensifying; Hispanic consumer concern affecting on-premise traffic

- **Wine's Structural Reset**: Participation down to 29% of adults; 512 fewer wineries YoY

- **Distribution Disruption**: RNDC California exit causing ripple effects; consolidation accelerating

### Major Company Moves:

- **Kirin** selling Four Roses bourbon to E&J Gallo for up to $775 million

- **AB InBev** acquiring 85% stake in BeatBox for $490 million

- **Johnson Brothers** becomes #3 U.S. wine wholesaler via Maverick acquisition

- **Barrell Craft Spirits** consolidating facilities, selling Jeffersontown site

- **New Belgium** restructuring with workforce reductions

- **WhistlePig** CEO departure; Alex Roberts named new CEO

- **Uncle Nearest** receivership continues; ~$100M debt, potential Q2 sale

### Key Data Points:

- U.S. spirits overall: +1.9% volume, -2.2% value (2025)

- Prepared cocktails: +37.3% volume (latest 4W)

- Tequila: -6.5% December sales (NIQ); Casamigos -22.1%, Don Julio -11.4%

- Beer: +2.2% volume latest 4W vs -1.1% prior; improving trend

- Michelob Ultra: +9.0% volume; Bud Light -6.2%

- Modelo: +4.5% volume; Pacifico +14.9% dollars; Victoria +29%

- NA Beer: +24.9% dollar growth

- Wine: $114B value (+5%) on 366M cases (-1.7%); 29% participation rate

- California vineyards: 38,134 acres removed Oct 2024-Aug 2025

### Regulatory & Trade Updates:

- U.S. importers paid $200M+ in tariffs through October

- U.S. spirits exports to Canada at ~25% of prior levels

- Washington state Senate passed 0.05% BAC bill

- NY denied Trader Joe's wine store application

- Supreme Court amicus brief on AZ wine shipping rules

- Cannabis rescheduling executive order could impact THC beverage competition

### Consumer Trends:

- 54% of U.S. adults drink alcohol (near 90-year low)

- ~50% of Gen Z adults drink

- 12% of U.S. adults on GLP-1 medications

- Cannabis drinks +8.2% YoY; shots +23.1%

- 18M frequent cannabis users vs 15M frequent alcohol users