SipSource® May Market Update: Trends Continue as the Industry Looks Toward Seasonal Momentum

The wine and spirits industry trend patterns continue, with Wine & Spirits Wholesalers of America's SipSource^® data showing rolling 12-month depletion trends largely unchanged from last month, despite one fewer shipping day compared to May 2025. While overall performance remains in negative territory, the absence of meaningful movement in either direction suggests the market is settling into a more predictable operating environment as it enters the summer selling season.

Key Takeaways:

• Trend patterns continue, but what growth there is remains uneven. Despite remaining in negative territory, depletion trends held largely steady in May, settling into a more predictable operating environment as the industry enters the summer selling season.
• On-premise continues to outperform off-premise. Consumers are still prioritizing social experiences, with bars and restaurants significantly outperforming retail channels for both spirits and wine. A broader industry recovery will depend on improving off-premise demand, where most beverage alcohol volume is sold.
• Summer presents reasons for cautious optimism. An additional shipping day, seasonal demand, easier year-over-year comparisons, and stabilizing distribution trends could provide incremental improvement, while strong-performing segments like Sauvignon Blanc, Prosecco, Champagne, and Bourbon remain bright spots to watch.

One of the clearest themes continues to be the divergence between on-premise and off-premise performance. Consumers remain willing to spend on social occasions and experiences, allowing restaurants and bars to outperform retail channels across both spirits and wine. Over the latest 12-month period, spirits on-premise volume trends outperform off-premise by 340 basis points, while wine shows an even wider 660 basis point advantage. These results reinforce that recovery is being driven more by where consumers are choosing to purchase rather than by broad-based category growth.

Distribution metrics are also showing encouraging signs of stabilization. While Points of Distribution (PODs) remain negative, the pace of contraction has eased considerably from a year ago. Spirits POD trends stand at -2.4%, representing a 100-basis-point improvement from May 2025, while wine PODs improved 30 basis points year over year to -3.9%. Although suppliers continue to rationalize assortments and retailers remain selective with shelf space, the slower rate of distribution loss suggests much of the recent reset may be moderating.

Looking ahead, June presents several reasons for cautious optimism. An additional shipping day compared to June 2025 should provide a modest lift to reported depletion trends. The summer calendar may also benefit the on-premise channel, with the FIFA World Cup activity expected to generate incremental traffic at bars and restaurants. While these factors should provide support, sustained improvement in overall industry performance will ultimately require stronger momentum in the off-premise channel, where the majority of beverage alcohol volume is still sold.

Year-over-year comparisons should also become increasingly favorable over the coming months, particularly for wine, where softer prior-year results create more manageable comparisons.

Several product segments are worth monitoring as these dynamics unfold. Bourbon continues to show gradual improvement, with revenue down just 1.4% over the latest three-month period. Tequila Reposado experienced a softer May following encouraging gains in March and April, making it an important segment to watch heading into summer. Within wine, Sauvignon Blanc continues to distinguish itself, posting 2.6% revenue growth over the past three months. Pinot Noir cooled after two consecutive months of stronger performance, while sparkling wines remained a bright spot, with both Prosecco and Champagne delivering robust sales during May.

As the industry moves into the heart of the summer season, the combination of more favorable calendar comparisons, seasonal demand, and stabilizing fundamentals may provide the opportunity for incremental improvement. Whether that translates into a meaningful shift in overall category performance will depend largely on whether off-premise demand begins to strengthen alongside the continued resilience of the on-premise channel.