San Antonio, TX – At the American Distiller Institute 2025 Conference held in San Antonio, Texas, Brian Kruger of Bump Williams Consulting, delivered a data-packed keynote that mapped out both the headwinds and the emerging growth opportunities shaping the alcohol beverage alcohol. The Ferovinum team was there and heard his message clearly: while overall consumption trends remain challenging, the future belongs to those who understand shifting consumer dynamics and move quickly to capture opportunities in innovation, flavour and category diversification.
A changing consumer base
Kruger opened with a blunt assessment: US alcohol consumption is declining across channels. According to a consumer survey conducted earlier this year:
- 27% of consumers reported drinking less alcohol over the past 12 months.
- 44% said their consumption has decreased when visiting bars, taprooms, or distilleries.
- Gallup polling shows self-reported drinking at 54%, down from a recent high of 67%.
- The number of drinks per occasion has fallen from 4 to 2.8, matching historic lows.
Health concerns and shifting lifestyle priorities are driving much of this change. Kruger pointed to 53% of consumers now believing alcohol is “bad for health” — the highest level yet recorded.
Rise of cannabis, non-alc and ‘occasion’ competition
Kruger underscored the reality that beverage alcohol is no longer competing solely within its traditional categories. Cannabis is a major disruptor:
- 30% of U.S. adults now identify as cannabis consumers.
- 78% of those report substituting cannabis for alcohol at least occasionally.
Meanwhile, the rise of non-alcoholic offerings — from NA beer to spirits and wine — continues to reshape shelves. Paired with energy drinks, hydration products, and even the growth of online gambling, alcohol brands face an increasingly fragmented competitive environment for consumer “occasions.”
Categories in transition
Kruger’s breakdown of category performance highlighted where consumer demand is moving:
- Beer: Down nearly a full share point year-to-date, with 9,500+ craft breweries struggling to offset multinational declines. Both traditional and flavoured beer are losing ground.
- Spirits: Flat overall, but flavoured spirits are up 16%, while traditional spirits are down 2%.
- Wine: Traditional wine continues to decline, but flavoured wine and wine alternatives — including orange wine — show pockets of opportunity.
- Soft Drinks & Energy: Both categories continue to gain share, with soft drinks alone adding 0.6 percentage points this year.
The spirits segment showed the most nuanced story:
- Tequila: Growing strongly, driven by demographic shifts and rising consumer preference for agave spirits.
- Ready-to-Drink Cocktails (RTDs): Up 16.7% year-to-date, representing $268 million in incremental growth.
- Whiskey & vodka: Experiencing notable declines, though smaller craft and regional players are performing better than large international brands.
Flavour growth
Flavour was a recurring theme throughout Kruger’s presentation. He noted that consumer craving for flavour continues to drive growth across categories:
- In spirits, the share of dollars from flavoured products rose from 4.7% in 2021 to 11% in 2024.
- RTDs and prepared cocktails are the clearest beneficiaries of this trend, bringing excitement and innovation to retail shelves.
- While beer is seeing losses even in flavoured extensions, spirits and wine alternatives are finding growth through bold, differentiated flavour profiles.
Strategic takeaways for producers
Kruger emphasised that success requires discipline, data, and alignment across the supply chain. His key recommendations included:
- Own your local brand story: Build strong local relevance and tell a unique brand story, even in competitive regional markets.
- Leverage data: Producers must understand consumption shifts, retailer decision-making and distributor dynamics.
- Align with retail & distribution: Growth depends on syncing innovation and portfolio decisions with retailer priorities.
- Target pockets of opportunity: Non-alcoholic innovation, agave spirits, and RTDs represent the clearest growth channels.
- Play the long game: With volatility as the new normal, patience and sustained investment are essential.
Optimism through innovation
Kruger closed on an encouraging note: “Volatility creates opportunity,” he said. While the industry faces undeniable pressures, he underscored that innovation — particularly in flavour, category diversification, and consumer engagement — provides ample paths to growth.
“The categories that are winning are those connecting with today’s consumer through flavour, health perception, and accessibility,” Kruger noted. “That’s where the future of this industry lies.”
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