Weekly Beverage Alcohol Recap | October 24, 2025

The US beverage alcohol industry faces its most dramatic transformation in decades. Consumer participation hit record lows, major suppliers are slashing forecasts and workforces, yet clear winners emerge: non-alcoholic beverages up 22%, RTDs becoming the growth engine, and hemp-derived THC drinks creating new competition. We break down October 2025 market data to understand what's really happening.

THE CRISIS

• Only 54% of US adults drink alcohol (record low)
• Beer volumes down -4.5% YTD; wine sales back to 2011 levels
• Diageo cut forecast to +0.9%; Pernod Ricard to -10.4%
• Brown-Forman cut 650 jobs; Molson Coors cutting 400 roles
• Kentucky bourbon barrels at all-time high: 16.1 million (oversupply crisis)
• Primary driver: Cost-of-living pressure, not just wellness trends

THE WINNERS

Non-Alcoholic: $925M in sales, +22% YoY (Athletic Brewing +57%)

Mexican Imports: Constellation hit 20.56% beer share; Pacifico +25%

Spirit RTDs: Only growth category in 2024; now 8% of total servings (vs 4% in 2019). Boston Beer's Sun Cruiser hit ~3M cases in Q3; Surfside grew 362% and is suing AB InBev over trade dress

Hemp/THC Beverages: Minnesota stores report THC drinks offsetting wine/beer declines, especially with women 25-40 replacing weeknight alcohol

REGULATORY CHAOS

• 86% of federal TTB furloughed - label approvals suspended during peak season
• Previous shutdown created 5-month backlogs
• Congress may close Farm Bill loophole on hemp-derived THC beverages
• California DTC spirits pilot starts Jan 1, 2026

2026 OUTLOOK

Efficiency Over Growth: Heritage Distilling going asset-light; Eagle Rock using AI for +9% gross profit

Supply Challenges: California grape crush at 2.9M tons (20-year low), expected to drop another 400k tons

Innovation Focus: Higher ABV RTDs (12%+), Mexican import extensions, non-alc expansion

KEY TAKEAWAY

The industry is bifurcating: value brands and alternatives (non-alc, RTDs, THC) win while the premium middle collapses. The question: Is this permanent decline or transformation into "beverage" with alcohol as just one functional option?

Companies Mentioned: Diageo, Pernod Ricard, Brown-Forman, Molson Coors, AB InBev, Constellation Brands, Boston Beer, Athletic Brewing, Surfside, RNDC

Data Sources: Circana, Gallup, NABCA, IWSR, NIQ, Jefferies