## SHOW NOTES

**Top Stories**

- **Pernod Ricard & Brown-Forman confirm merger talks** — potential $31B combined entity; Citi puts deal odds at 50/50; Jefferies projects $450M in synergies; governance and balance sheet challenges remain

- **E. & J. Gallo closes $775M Four Roses acquisition** — highest price ever for a Kentucky bourbon distillery; returns brand to US family ownership after 83 years

- **Diageo North America CEO Sally Grimes departs suddenly** — replaced by 30-year veteran John O'Keefe; comes as Diageo US spirits sales fall 11.6%

- **Southern Glazer's acquires ~22M ABI beer cases in under a year** — Clare Rose, Eagle Rock, and ABI's NY distributorship; building parallel beer empire

- **Reyes Beverage Group acquires RNDC operations across 11 markets** — names Brian Albenze as market president

**Market Data**

- US bev-alc volume fell 5% in 2025 (IWSR); off-premise dollar sales down 2.7% in latest 4-week period (NIQ)

- Spirits ex-prepared cocktails: -6.1% dollars, -4.8% volume

- Wine: -5.1% dollars, -5.9% volume

- Beer: -1.3% dollars, -3.0% volume (improving sequentially)

- Prepared cocktails: +5.4% dollars — sole growth category

- Spirits-based RTDs: +35% value, +36% volume

- RTD share of total bev-alc: 6% (2019) ? 13% (2025)

- Only 54% of Americans report drinking alcohol (Gallup — new low)

**American Whiskey**

- Production down 28% YoY through August 2025; lowest since 2018

- 16.1M aging barrels in Kentucky — all-time record

- Exports down 19% ($250M decline); EU exports -35%, Canada -70%

- Jim Beam, Diageo, Brown-Forman all curtailing production; MGP contract business cut by more than half

- Green River lays off head distiller; LF Heritage ordered into foreclosure; Goodwood seeks merger

**Flavored Bev-Alc Power Rankings**

- Top 10 vendors control 81.2% of dollar sales

- BuzzBallz: $794M (+50.1%); Cutwater: $585M (+100.5%); BeatBox: $413M (+31.4%); Surfside: $191M (+115%)

- High-ABV (8%+) sub-segment: 36.9% of total, up 19.3% to $5.5B

**Wine**

- California 2025 crush: 2.62M tons (above expectations); 18 months of supply projected

- 38M US beer/spirits drinkers cite taste aversion as barrier to wine

- DtC wines above $50 = 71% of total shipment value (up from 52% in 2020)

- Imported wine volumes down ~8% Oct-Jan vs. domestic wines down 3%

**M&A & Deals**

- Tilray completes BrewDog acquisition at £41M (~$54.5M)

- Firestone Walker acquires Trumer Pils US rights from Gambrinus

- Hood River Distillers acquires Crater Lake Spirits

- Constellation acquires remaining HOPWTR stake

- KDP completes JDE Peet's acquisition; planning separation into Coffee Co. and Beverage Co.

- Sysco acquires Jetro Restaurant Depot for $29.1B

- Breakthru Beverage enters hemp THC beverage distribution in Minnesota

**Key Consumer & Macro Signals**

- Jefferies Consumer Pulse: 89 (lowest since Nov 2023)

- 31% of drinkers cite financial pressure as moderation driver

- GLP-1 drugs: 23% of users drink less dining out; 39% drink less overall

- Gen Z unemployment: 9.2%; cocktail prices exceeding $20 dampening on-premise occasions

**Legal & Regulatory**

- Oz Trading permanently enjoined from counterfeit Modelo/Corona labels

- Tito's Vodka ordered to pay $749K Maine back taxes

- ABI pays $2.3M Fairfield brewery emissions penalty

- TTB recommends delaying Q1 2026 CBMA claims due to data error

- Colorado bev-alc fee bill defeated in committee

- Treasury Wine Estates: shares down 63%; near-$1B US asset write-down flagged