US Spirits & Beer Scanner: Selective Spirits Recovery, But Beer Deterioration Intensifies

Core Conclusion

The latest four-week US off-trade scan reveals a diverging trajectory: spirits sales declines are moderating sequentially, while beer deterioration is accelerating. Within spirits, Pernod and Remy show the clearest signs of stabilization, whereas Diageo continues to cede share despite an improving top-line trend. In beer, ABI’s share gains and non-alcoholic momentum stand in sharp contrast to Heineken’s accelerating volume losses. For investors, the data signal that not all consumer weakness is equal—brand strength, category exposure, and share dynamics are now driving sharper performance dispersion across the European beverages universe.

Evidence Chain

Spirits: A Tentative Inflection, but Share Shifts Matter Total US spirits off-trade sales fell 2.3% in the four weeks to 16 May, an improvement versus the 12-week trend of -2.7%. Volumes grew 2.8%, while price/mix declined 5.0%, confirming that the recovery is being led by volume, not pricing power. This pattern suggests consumers are trading down or buying on promotion, a headwind for premium-heavy portfolios.

At the issuer level, the narrative is nuanced:

• Remy Cointreau posted the smallest decline at -4.2%, an improvement over its 12-week -4.7%, with stable value and volume share. This points to early demand resilience in its core cognac franchise, despite a tough macro backdrop.
• Pernod Ricard also showed sequential improvement, with sales -8.0% vs. a 12-week -8.6%, and price/mix pressures easing to -0.3% from -1.2%. The sequential stabilization in price/mix is a noteworthy signal, indicating that the worst of the down-trading may be moderating for its portfolio.
• Diageo improved to -9.9% from -10.6%, but lost 135bps of value share. The share loss is the critical takeaway: even as the trajectory improved, competitors are gaining ground. Including beer, Diageo’s trends were broadly stable but still losing share.
• Campari saw a notable deceleration to -6.4% from -4.9%, with both value and volume share slipping. The reversal from prior steadiness raises questions about whether its brand momentum is fading in the current environment.

Beer: Broad-Based Weakness, but ABI Stands Apart Beer category sales fell 6.0%, materially worse than the 12-week -3.5%, with volumes down 7.0%. Pricing remained positive at +1.1%, helping to offset some volume pressure, but the overall demand backdrop has clearly softened.

• ABI (Anheuser-Busch InBev) outperformed the category meaningfully, posting sales -3.8% and securing 70bps of value share gains. Including spirits RTDs, sales were -1.3%, just below flat. Crucially, its non-alcoholic beer portfolio surged +17.5% vs. category growth of +5.9%, highlighting a structural growth pocket that ABI is exploiting effectively.
• Heineken was a clear underperformer, with sales plunging -12.4% and volumes down -14.1%—both far worse than 12-week trends. It lost 25bps of both value and volume share. Non-alcoholic beer sales fell -8.3%, in stark contrast to the category, pointing to execution or brand positioning challenges.

Key Risks

• Channel and duration limitations: The data covers only US off-trade (grocery/liquor store) channels, missing on-premise recovery dynamics that could alter the picture. The four-week snapshot is inherently noisy and can be swayed by promotional phasing or shipment timing.
• Macro and consumer discreteness: A further deterioration in US consumer confidence could deepen volume declines across both categories, rendering the current stabilization in spirits temporary.
• Competitive responses: Share gains by ABI in beer and relative stability at Remy/Pernod could prompt aggressive promotional or innovation responses from peers, compressing margins.

Investment Implications

The scan reinforces a selective approach to European beverages. ABI (BUD) emerges as the most resilient name in beer: its share gains, positive pricing, and booming non-alc segment provide a defensive growth narrative even as the category struggles. In contrast, Heineken (HEINY) is exhibiting accelerating share losses and an inability to participate in non-alc growth—a combination likely to weigh on sentiment and estimates.

In spirits, Remy (REMY) and Pernod (PRNDY) are showing the earliest signs of sequential improvement with stable or improving price/mix, making them candidates for a potential re-rating if the trajectory holds. Diageo (DEO) , while improving on the top line, continues to shed share; until share loss stabilizes, relative underperformance may persist. Campari (CPR) bears watching, as the L4W deceleration could mark the start of a tougher period for its previously resilient brand mix.

The overall message: top-line pressures are not lifting uniformly, but the dispersion is widening. Position for share gainers with exposure to structural sub-trends (ABI’s non-alc) or spirits names demonstrating pricing stabilization (Remy, Pernod), while avoiding those losing traction on both volume and share (Heineken).

Appendix: Key Performance Snapshot

Source: NielsenIQ data, compiled by Morgan Stanley Wealth Management. Tickers: DEO, PRNDY, CPR, REMY, BUD, HEINY.