Back in our college years, we all remember the days when partying seemed to be the only form of entertainment, and as broke college students, finding the cheapest liquor brand possible was like scoring the jackpot.
Although we might consume the finer wines and spirits now as grown adults, back then, Svedka and Smirnoff were our vodkas of choice, Four Loko was our favorite canned cocktail, and Franzia was the finest wine we could afford.
🚨Don’t miss this amazing Cyber Week Move! Get 60% off TheStreet Pro. Act now before it’s gone. 😲
However, the world has become more health conscious, prioritizing nutrition labels with lower sugar content and fewer calories rather than focusing on higher proof percentages.
This trend has prompted many to experiment by diving into the 'sober-curious' scene. Maybe not completely, but at least reducing or limiting the number of alcoholic beverages consumed on a night out by leaning towards the non-alcoholic alternatives.
Related: Guinness parent makes major investment in a surprising market
The U.S. has become a very profitable market for the non-alcoholic beverage industry, ranking among the top countries worldwide. As a result, many beverage companies, like Molson Coors, Diageo, and LVMH, are launching new products.
Image source: Shutterstock
The sober-curious market threatens the alcoholic beverage industry in the U.S.
According to a study by IWSR, the total beverage alcohol (TBA) volumes in the U.S. decreased by 3% in 2023 due to imbalanced inventories, economic pressures, and the increasing popularity of non-alcoholic beverages.
This was the first time in the last 30 years that the industry saw declines in alcoholic beverage consumption, especially in spirits sales, which reported a 2% volume decline.
The same study reports that TBA consumption is expected to decline continuously by 1% over the next four years.
Related: Popular luxury brand invests in 'sober market'
On the other hand, the percentage of drinkers consuming non-alcoholic beverages in the U.S. doubled from 6% in late 2023 to 13% in early 2024.
The sober-curious market is thriving, with zero-proof beer volumes increasing by 19% and non-alcoholic spirits surging by 38%, so much so that by 2028, both are expected to register strong double-digit growth.
Constellation Brands hit by declining alcohol demand
The decline in demand for alcoholic beverages has negatively affected even some of the industry's top companies like Constellation Brands (STZ) , an international producer and marketer of beer, wine, and spirits with renowned brands such as Corona, Modelo, Svedka, Kim Crawford, and more.
According to Constellation Brands' second-quarter earnings report for 2025, net sales in its wine and spirits sector were down by 12% compared to last year, driven by a nearly 10% decline in shipment volumes, primarily in the U.S.
In its outlook for the rest of fiscal 2025, the company expects sales to continue declining by 4% to 6%.
Constellation Brands to sell Svedka to rival
On Tuesday, Constellation Brands (STZ) announced that it would be selling Svedka vodka to Sazerac.
The deal is expected to be finalized in the next few months, but neither company has yet to disclose the specific terms or financials of the agreement.
In 2007, Constellation Brands acquired Spirits Marque One LLC, the owner of Svedka vodka, for $384 million. Since then, the vodka brand has become one of the best-selling and most well-known brands in the U.S.
Although Svedka is one of the most popular vodka brands in the U.S., the decline in the demand for wine and spirits has prompted Constellation Brands to distance itself from the more affordable liquor offerings and focus on premium wines and spirits to generate more revenue.
“This transaction is another step forward in seeking to ensure that our wine and spirits portfolio is optimized to succeed and to meet our growth objectives,” said Constellation Brands CEO Bill Newlands.
More Retail News:
- Popular beer company enters the sober market
- Target "haul" gets viral TikTok influencer arrested
- Olive Garden responds to customer's viral breadstick moment
Sazerac is a privately owned American liquor company with over 450 alcohol brands, including Fireball, Southern Comfort, Buffalo Trace, and more.
This latest acquisition of Svedka vodka comes nearly six months after Sazerac acquired BuzzBallz, an affordable pre-mixed canned cocktails brand. However, since 2022, when it bought the Irish Louh Gill Distillery from Hazelwood Demense Ltd, Sazerac hadn't added any new brands to its portfolio.
Related: Veteran fund manager sees world of pain coming for stocks
