Importers & Exporters Top 100 2024

Post-pandemic inventory hangover hindering US alcohol imports

By Michael Angell

Alcoholic beverage shippers are feeling the lash of the so-called bullwhip effect after two years of strong , steady import volumes during the COVID-19 pandemic gave way to destocking of oversaturated inventories in 2023 . But shippers are hopeful that demand will return in 2024 , even as changing preferences among US drinkers are impacting some categories of wine and spirits .

Containerized US imports of wine , beer and distilled spirits plummeted 17.7 % year over year to 385,385 TEUs in 2023 , according to PIERS , a sister product of the Journal of Commerce within S & P Global . In the previous five years , volumes had been holding firm , ranging between 451,047 TEUs in 2018 and a peak of 475,191 TEUs in 2021 . products ,” she said . “ The RTD category has proliferated at the expense of wine consumption .”

Those changing consumer preferences have also reduced container import volumes due to the method in which certain products are shipped , Leavitt said .

Alcohol used as an ingredient to make pre-mixed cocktails and hard seltzers , for example , is typically shipped in a flexible bladder fitted inside a container , which can hold about the same amount as four containers of bottled wine or spirits .

In addition , many of the fine-dining restaurants that sold off their wine cellars as a means of survival during the pandemic “ are not replenishing those cellars as quickly as people would have thought ,” Robert Tobiassen , president of the National Association of Beverage Importers , told the Journal of Commerce .

“ All of a sudden , everybody realized we have too much inventory for the next three months .”

Restaurants that sold their wine during the pandemic have yet to fully replenish their stocks . Shutterstock . com

Alcoholic beverage importers ordered too much product in 2021 and 2022 , and once US port congestion cleared and vessels discharged their cargo at the end of 2022 , inventories ballooned , and shippers almost immediately cut back on orders , according to Alison Leavitt , managing director of the Wine and Spirits Shippers Association ( WSSA ). Imports dropped 40 % on a year-over-year basis in the first quarter of 2023 .

“ We didn ’ t see the drop off orders until all these shipments flooded the market at the end 2022 ,” Leavitt told the Journal of Commerce . “ All of a sudden , everybody realized we have too much inventory for the next three months .” Among major exporters of alcoholic beverages to the US , France saw the largest decline in market share , accounting for 11.8 % of imports in 2023 , down from 14.4 % the previous year .

Leavitt said overordering in 2021 – 22 was particularly pronounced among wine importers . Shipments of wine from France sunk 13 % in 2023 , while imports of other high-end spirits from France , including vodka , cordials and liqueurs fell 44 %, according to PIERS .

Forecasting US wine demand has become increasingly challenging in recent years due to rapid changes in consumer tastes , Leavitt said , with younger drinkers gravitating toward ready-to-drink ( RTD ) cocktails and hard seltzers .

“ It ’ s wine consumption that has declined more than other categories as consumers switch to other types of

www . joc . com May 20 , 2024 | Journal of Commerce 41