New York (CNN) — The hangover has finally arrived for spirits and beer companies, as soaring sales boosted by Americans who stayed at home during the Covid-19 pandemic is over.

Profits from some of the world’s largest alcohol producers, including Rémy Cointreau, Absolut vodka maker Pernod Ricard, tequila producer Jose Cuervo Proximo Spirits and beer conglomerate Anheuser-Busch, have all recently reported falling profits. volumes or sales in a context of customer reluctance in the face of an increase. price.

Overall volumes fell 3% in the first seven months of 2024, which was more than expected, according to a report from beverage analytics firm IWSR. All major categories were affected, including tequila, American whiskey, beer and wine. The only positive point was the canned cocktails categoryslightly growing at 2%.

“As the spirits industry continues to recalibrate after the extraordinary increase in sales during the pandemic, inflation and high interest rates are slowing the growth of the spirits sector,” said Lisa Hawkins, head of communications. from the Distilled Spirits Council of the United States, to CNN. .

Spirits companies have faced excess inventory, particularly in the United States, due to a drop in demand. This forced Rémy Cointreau, whose stock fell 50% over the year, to reduce its forecasts for the whole year and expect another year of double-digit sales declines.

“This performance reflects the continued destocking in the United States against a backdrop of persistently low depletion and, above all, below our expectations,” said Luca Marotta, financial director of Rémy Cointreau, during a recent conference call on the results, adding that sales in the United States saw a “very sharp decline” of 22.8%, its cognac brands being the worst performers.

Pernod Ricard, which also makes Jameson and Kahula, also shares this sentiment. U.S. sales fell 10% in the latest quarter because retailers “continue to closely manage their inventory levels and promotional intensity remains strong,” said Hélène de Tissot, the company’s chief financial officer. company, during a recent call.

These declines constitute a “normalization” within the industry, with alcohol sales close to their pre-Covid levels, according to Marten Lodewijks, IWSR president for the US division. Inflation and reduced customer discretionary spending have also hurt bottlers’ bottom lines.

“Consumers have reduced their spending on spirits due to the generally higher cost of a bottle of spirits and have begun to shift more toward beer and (ready-to-drink canned cocktails) which cost less per serving,” , he told CNN. “The industry continues to recover from the incredible growth seen immediately following the pandemic. »

Shift to private labels

Inflation-weary customers have shifted their shopping habits to unexpected places. Cheaper private brands have experienced a boon in sales, reflecting a broader trend of customers seeking more affordable options in all aspects of their lives.

Aldi is a private label that has seen its sales increase. It sells spirits-based cocktails, ready-to-drink beverages, wine and a popular assortment of seasonal beers in approximately 2,000 of its stores in the United States.

Aldi’s line is seeing double-digit sales growth, bucking broader industry decline trends, Arlin Zajmi, director of national adult beverage buying, told CNN.

“For us, it’s a completely different story,” Zajmi said. “That’s really how much private labels have grown in the last 10 years. Customers really saw the value proposition of quality and price.

Aldi’s rapid expansion also helped its beer portfolio increase sales by 100%, with more than a quarter of U.S. households shopping at discount chains, twice as many as six years ago. Part of that is bolstered by the popularity of its malt-based seltzers, which cost less than name-brand competitors like White Claw.

Its expansion “has been timed exactly when shoppers are more price-sensitive, so a six-pack at Aldi for $8 or $9 might seem almost revolutionary once drinkers get used to seeing prices for the crafts for $12 and up at major grocery chains,” Bryan. Roth, editor-in-chief of the alcohol newsletter Sightlines+, told CNN.