This would be a challenging time for the beverage alcohol industry even if the focus was solely on the products. With customer preferences changing and trends shifting due to moderation in or abstention from alcohol consumption, businesses in the industry already have their hands full trying to cater to what customers want.
Yet there is much more to worry about for companies in the beverage alcohol industry. A couple of recent developments out of Washington, D.C. have those companies trying to figure out what to do. Here’s an overview of where the industry stands right now and how analytics are a necessity for a company trying to make its way through adversity.
A slew of challenges
Ever-changing consumer preferences is a problem that those in the beverage alcohol industry are used to. Trends come and go, and industry experts are accustomed to adjustments and predictions based on past behavior. Such is the case with today’s trends, where new IWSR data shows “light drinkers” have surpassed “medium” and “heavy” drinkers to be the largest segment in IWSR’s consumer research.
The harder-to-predict problems are the ones that can throw organizations for a loop, and those seem to be coming one after another. January’s wildfires affected many people in the California wine industry, but it did not inflict major damage on businesses. They did, however, provide a reminder that severe weather, be it fire or heavy rains (or lack thereof) or extreme temperatures, can be devastating for the industry.
Governmental impact
On top of these natural elements are the legislative ones. There have been developments at the administrative level over the past few months that are impacting the industry. The first came with the news that the surgeon general called for labels on alcoholic beverages, like the ones on cigarette packs, warning of the risk of cancer. While further steps would need to be taken to put that into effect, the news by itself was enough to have customers questioning their drinking choices.
The other development involves tariffs, which have hit the beverage alcohol industry particularly hard. Canadian retailers have removed U.S. alcohol from their shelves, and the European Union has announced its own countermeasures to tariffs from the United States that include resuming a tariff on U.S. whiskey. Donald Trump has threatened an even higher tariff on alcohol from Europe, including wine and champagne, in response.
How analytics can help
The beauty of analytics is an organization can use data to make decisions based on previous similar situations. While all of this may seem unprecedented, there are comparable events that a business can learn from, if it has the right technology. During Trump’s first term, American wine businesses were impacted by tariffs the president imposed on European foods and beverages. While the percentages are significantly different this time around, a customizable analytics solution can help an organization figure out the best way to navigate the current scenario based on the data gathered the first time around.
Some organizations have stockpiled European wines in advance of the additional costs. It takes accurate data to forecast those numbers accurately. An importer needs an analytics solution that can help it predict the right amount of product that will sell so that they will not be left with too much inventory that will go to waste or need to be marked down.
When it comes to natural disasters, some of the wineries that were devastated by fires in 2017 and 2020 took a new approach when they rebuilt. Some reimagined their spaces, others took practical steps like installing double-sealed doors and vents to manage smoke while building with non-flammable materials such as concrete, steel, and glass. These are the types of decision analytics can contribute to. One winery rebuilt so that it is 100% solar-powered. While this is an environmentally-friendly decision, it is also an economically efficient one.
Data doesn’t hold all of the answers for every scenario. But when times get tough and business decisions need to be made, it can provide guidance for those decisions so that it doesn’t feel like guesswork.
- Using Data in Corporate Sustainability Initiatives - April 22, 2025
- Measuring University ROI with Analytics - April 17, 2025
- What My Recent ER Visit Taught Me About Healthcare and Data - April 15, 2025
