The total beer category lost the most share of overall beverage dollars at off-premise retailers year-to-date through late September, according to NIQ data shared by Bump Williams Consulting (BWC).
Beer – which includes flavored malt beverages (FMB), hard seltzer and hard cider – lost -0.5 sharepoints for the 39-week period ending September 28. This was far greater than the other share donors – wine, sports drinks and fruit juice – which each lost -0.1 sharepoints.
Despite the loss of share, beer remains the largest category in overall beverages by dollar share. It accounts for 23.6% of all dollars spent on beverages, followed by soft drinks (20.7%), energy drinks (10.2%), water (7.1%), wine (6.8%), spirits (5.8%), sports drinks (5.3%), fruit drinks (4.6%), fruit juice (3.5%), liquid tea (2.9%) and all other beverages (9.6%).
Soft drinks (+0.7 sharepoints) were the largest share gainer, followed by energy drinks (+0.1 sharepoints) and spirits (+0.1 sharepoints).
BWC founder Bump Williams pointed to a host of factors contributing to headwinds for beer.
“Today we find ourselves struggling to compete against new competitors from outside of beverage-alcohol, the WHO [World Health Organization], tariffs, cannabis and delta-9 availability, a tougher economy with higher inflation/interest rates, the loss of on-premise sales and the emergence of a new ‘Cocoon Generation’ that would prefer to stay home, drink non-alcoholic beverages and interact with their friends via social media computers/hand-held devices than to go out and have a beer, martini or glass of wine at a bar, restaurant or local watering hole,” he wrote.
“It’s a whole new world out there and it has challenged everyone to seek out new growth strategies across the three tiers in order to survive.”
As it does every year, BWC surveyed businesses across the supplier, distributor and retailer tiers on their growth strategies for 2025-2026 and found that objectives vary across all three. The chasm in strategy has only grown in the nearly two decades that BWC has conducted the survey.
“When I first did this in 2008, we were fairly tight in terms of alignment (survive recession, building brands, innovation, flavor-forward expansion, high-end brand growth, maintaining high levels of service and capturing more share of space for beer),” Williams wrote. “As we drifted into the 2010s, those growth strategies began to get out of alignment.”
In what Williams called “the imperfect storm,” brewers began to focus on SKU proliferation, innovation and price increases; while distributors entered a “brands race” to expand their books as widely as possible; and retailers entered “high-end mode” focusing on above-premium offerings.
“Everyone’s compass was pointing in a different direction and the share of total alcohol began to shift away from beer into other choices of beverage satisfaction,” he wrote.
Looking ahead to 2025, suppliers, distributors and retailers have vastly different No. 1 priorities for the coming year. Suppliers/manufacturers’ top priority is to “find strategic partners,” while distributors are looking to expand their “total beverage portfolios” and retailers are focused on managing pricing and promotion, according to BWC’s survey.
There are some ties that bind the three tiers. Suppliers’ goal of finding strategic partners connects to distributors’ No. 3 priority of reducing the number of SKUs and brands in their warehouses and No. 8 goal of reducing beer inventory. At retail, factors align with retailers’ desire to eliminate duplicate SKUs (No. 4) and become more selective about taking innovation products (No. 5).
The desire for a more holistic view of beverages echoes across all three tiers. Suppliers are keen to add non-alcoholic options to their portfolios (No. 4), while distributors are looking to train staff on total beverages (No. 10) and retailers want to explore total beverage buying (No.11).
Below are the full top growth strategies rankings for all three tiers.
Suppliers:
- No. 1 Find strategic partners
- No. 2 Control expenses
- No. 3 Fix core brands
- No. 4 Non-alcholic beverage additions
- No. 5 Explore delta/THC options
- No. 6 Manage price and promotion mix
- No. 7 Distributor execution
- No. 8 Innovation
- No. 9 Operational efficiencies
- No. 10 Protect space at retail
Distributors:
- No. 1 Expand total beverage portfolio
- No. 2 Assess M&A opportunity
- No. 3 Reduce brands/SKUs
- No. 4 Succession planning
- No. 5 Account segmentation
- No. 6 Research THC/delta-9
- No. 7 Expand industry presence
- No. 8 Reduce beer inventory
- No. 9 Expand Hispanic portfolio
- No. 10 Total beverage training
Retailers:
- No. 1 Manage pricing/promotion
- No. 2 Market basket dollar composition
- No. 3 Focus on Hispanic shoppers
- No. 4 Eliminate duplicate SKUs
- No. 5 Selective innovation additions
- No. 6 Health and wellness and NA merchandising
- No. 7 Analyze shopper demographics
- No. 8 Reallocate selling space
- No. 9 Understand new consumer
- No. 10 “Value packages”
- No. 11 Total beverage buying