Alcohol Shortage Creates Opportunities for New Suppliers to Enter the U.S. Market

In the aftermath of COVID-19, the U.S. is experiencing a shortage of many alcoholic beverages. With States steadily easing restrictions, experts are predicting the demand will likely continue to outpace the U.S. inventories.

Read on to learn what led to this shortage as well as what it means for alcohol suppliers.

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Alcohol Sales Increased During the Pandemic

While other industries floundered during the pandemic, the U.S. alcohol industry flourished. Though global alcohol sales decreased, U.S. alcohol sales rose over the previous year, resulting in the greatest 1-year increase since 2002.

Home-bound consumers stocked up on alcohol when restaurants and bars were closed. Additionally, as some states started allowing restaurants to sell alcohol to go, consumers began including bottles of alcohol in their food pickup orders.

The demand for other alcoholic beverages has also increased. When bars shuttered their doors, consumers began mixing their drinks at home. Some have continued the practice, resulting in an increased demand for cocktail ingredients such as bitters and vermouth. Although the volume of spirits sold decreased, the overall revenue increased. This is because retail customers are more likely to purchase high-quality, more costly brands than restaurants.

States are Low on Customer Favorites

As pandemic restrictions lift, patrons are returning to bars and restaurants to find their favorite brands are out of stock. Popular brands in categories such as tequila, whiskey, rum, and vodka are difficult to find. Tequila sales increased by 46% in 2020, resulting in a strain on the current supply.

Supply chain disruptions caused by the pandemic have further contributed to the alcohol beverage shortage. A decrease in manufacturing employees has resulted in stalled production of aluminum and glass bottles. The packaging and labor shortages mean that, even when the alcohol is available, bottlers and distillers don’t have a container to put it in.

Some states are completely out of the most popular brands of liquor and spirits. Others have seen a diminished supply since the start of the pandemic. Many buyers have reported placing orders for cases of liquor and receiving a fraction of their requested amount.

Because both consumers and retailers are after the same products, suppliers aren’t able to meet the demand. ABC stores saw a 30% increase in sales in 2020 compared with the previous year. Online sales have also increased. The boom in retail sales overlapped with restaurants re-opening, and the alcohol industry was suddenly flooded with demand.

Shortage Has Increased Buyer Flexibility and Created Opportunities for New Suppliers

As top-shelf liquor manufacturers struggle to keep up with demand, restaurant and bar owners are relying on alternative brands. Because buyers are more open to other options, opportunities exist to provide products that were otherwise not considered. Bar and restaurant owners want to keep a wide variety of options available so that patrons have comparable backups.

Because certain beverages require substantial aging, it could be years before supplies are replenished. This situation creates an ideal opportunity for non-U.S. alcoholic beverage manufacturers to capture a new market share in the United States.

Requirements for Exporting Alcoholic Beverages to the United States

Businesses that manufacture, process, pack, or store beer, wine, and spirits that may be consumed in the United States must register their facilities with the U.S. Food and Drug Administration (FDA). To take advantage of the current U.S. demand, it is important that you register your facility with FDA as soon as possible.

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Registrar Corp’s trained regulatory advisors can help you quickly and properly register. For more information, contact us at +1-757-224-0177 or chat with a Regulatory Advisor 24-hours a day at https://www.registrarcorp.com/contact.

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For more assistance with FDA regulatory requirements, call: +1-757-224-0177, email: info@registrarcorp.com, or chat with a Regulatory Advisor 24-hours a day: www.registrarcorp.com/livechat.

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