The Top Beverage Alcohol M&A Deals of 2024: Unpacking Investors Strategic Playbook

From billion-dollar buyouts to strategic portfolio plays,  beverage alcohol's dealmaking landscape tells a fascinating story of power, strategy, and evolution. While the post-pandemic M&A frenzy may have cooled, 2024's high-stakes transactions revealed how the industry's biggest players are placing their bets on the future of drinks.

Join host Emmett Strack as he sits down with Ryan Lake, Managing Director of Arlington Capital Advisors, to decode the year's most consequential deals. Together, they'll unpack how industry heavyweights are repositioning for growth, why certain categories are attracting premium valuations, and what these moves signal about where the spirits business is headed. This conversation offers insights into the forces reshaping the beverage alcohol landscape in 2025 and beyond.

Featured Guests:

Ryan Lake, Managing Director, Arlington Capital Advisors 

Mentioned in this episode:

Park Street's 2024 M&A Report

Arlington Capital Advisors

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Transcript

After an M&A boom in the first couple of years of COVID, with a slew of deals going through in beverage alcohol, the market has moderated yet remained dynamic, with numerous high-profile acquisitions taking place last year. M&A deals aren't just financial transactions; they're strategic chess moves that highlight the dominant forces shaping beverage alcohol today. They also serve as a way for us to forecast the industry's future, as acquirers place bets on the categories and price tiers that will thrive for years to come.

With the help of Ryan Lake, we're going to examine some of the top deals that occurred in 2024, analyze the macroeconomic factors and consumer trends driving them, and look ahead to what 2025 holds for beverage alcohol investments. Ryan is the managing director at Arlington Capital Advisors, a boutique advisory firm that has completed transactions across all spirit segments and price tiers. He’s incredibly knowledgeable about this space, and today, we're reviewing the M&A environment to see which strategic acquirers were most active, what their moves indicate about the industry, and the types of deals being pursued.

Park Street has just released its 2024 M&A report, a comprehensive overview of last year's acquisitions. You can access it in the show notes. I'm your host, Emmett Strack, and this is the Park Street Insider Podcast.

Interview Begins:

Emmett: All right, Ryan Lake, welcome to The Park Street Insider Podcast.

Ryan: Thanks for having me.

Emmett: To start, I’d love to hear your thoughts after reflecting on the year as a whole. How would you characterize the state of investment activity in beverage alcohol in 2024?

Ryan: I’ll start at a high level. Overall, investment activity across all sectors—both in beverage alcohol and beyond—was generally lower than average last year. We came off a couple of post-COVID years with a lot of activity, so in some ways, 2024 was a natural regression. But that slowdown was probably exacerbated by high interest rates and other economic factors.

At a macro level, it was a slower year, and beverage alcohol was likely even slower than the broader market. However, the impact varied by subsector. If you look at non-alcoholic beverages, there was probably more activity than in the alcohol space.

Last year marked my 20th year working with beverage companies, and one of the most fascinating aspects of the past 12 to 24 months is that, for the first time I can recall—excluding RTDs—all three traditional beverage alcohol categories struggled to grow. I don’t remember another year like it, and I doubt it has happened in the last 20 years before my career started.

Usually, when beer struggles, wine or spirits pick up the slack, or vice versa. But in the last 18 to 24 months, everything has had a tough time growing. Some of that was demand-related, while some of it—particularly in spirits and wine—was due to oversupply. Post-COVID, a lot of product was pushed into the market, and as consumers returned to social drinking and slowed their purchases, that excess inventory remained.

Spirits, in particular, don’t go bad, which is great in good times, but when there’s too much inventory at the retail, wholesale, and consumer levels, it creates challenges. So, specific factors within beverage alcohol contributed to a steeper slowdown compared to other sectors, making 2024 a relatively quiet year for investing activity.

Emmett: That aligns with what we saw in the Park Street M&A Report. Ryan, you and I spoke last February at a seminar on the intersection of the M&A market and the craft spirits sector. At that time, we talked about how 2023 was a perfect storm of market skepticism—high inflation, big strategics still digesting past acquisitions, and overall buyer hesitancy.

Did any of those dynamics shift in 2024 compared to what we saw in 2023?

Ryan: I think we all hoped for a more normal year in 2024 after the challenges of 2023. Unfortunately, it wasn’t quite as normal as we’d hoped. Interest rates remained high, which impacted both acquirers and consumers. Inflation reduced disposable income, slowing down consumption, and overall, we didn’t see the rebound we were expecting. Maybe this year will be different—I’m cautiously optimistic.

A big factor last year was that the overstocking and subsequent destocking process took longer than expected. Many large spirits companies were hopeful that consumer demand would pick back up and that inventory at the wholesale and retail levels would clear faster. But it didn’t happen as quickly as anticipated.

If you look at Census Bureau data, wholesalers—especially in wine and spirits—were still holding significantly more inventory than the 30-year average. That supply issue will hopefully improve this year, but it’s still a challenge.

All of this impacts M&A because big companies typically acquire when they’re looking for new growth opportunities. But if the market isn’t growing, investing for growth becomes less of a priority. Instead, companies focus on streamlining operations—whether through divestitures, SKU rationalization, or internal restructuring—none of which supports M&A activity.

Emmett: That’s a great breakdown. Now, despite the overall slowdown, there were still deals happening. From a consumer perspective, what factors motivated companies to invest?

Ryan: Large suppliers always follow the consumer. Where consumers go, investment and M&A follow.

For the last 15 to 20 years, beer has been flat or declining, with share shifting toward spirits and, more recently, RTDs. Spirits consumption has continued to grow, though at a slower pace post-COVID. During the pandemic, consumers traded up to higher-end spirits because they were drinking at home, but as inflation impacted their budgets, that trend softened.

RTDs remain a strong growth area. However, the definition of an RTD varies across the industry. I take a broad view—anything that isn’t traditional beer, wine, or spirits but is ready to drink falls into this category. Whether it's spirits-based, malt-based, or wine-based, most consumers don’t differentiate much.

Consumers today want convenience, flavor, premiumization, and the right price point. That’s why RTDs continue to evolve, with brands catering to those preferences. This has drawn volume from both traditional spirits and beer, especially light beer, as consumers look for alternatives with more flavor and perceived better quality.

Emmett: That makes sense, and we saw that reflected in investment trends last year. By our count, spirits had about 31 high-profile acquisitions, compared to 25 across beer and wine combined. Within spirits, RTDs led with nine total investments, double the next-highest category—vodka, which had four. Gin and agave spirits also had four, while whiskey and low/no-alcohol each had two.

Something you mentioned earlier was “traditional spirits.” In recent years, we’ve seen non-traditional spirits companies enter the category—Molson Coors acquiring Blue Run, Tilray entering with Breckenridge, and Reyes partnering with Sazerac. Did that trend continue meaningfully in 2024?

Ryan: Yes, though maybe not as aggressively as some predicted. That said, just last week, Reyes announced it secured Tito’s distribution in California, so the convergence trend is definitely still alive.

We’re seeing cross-category investments at every level—whether through acquisitions, licensing deals, or distribution partnerships. This isn’t going away. How exactly it plays out remains to be seen, but convergence will continue shaping the industry for years to come.

Emmett: Yeah, and that was even reflected a bit last year. We saw Coca-Cola acquire Billson's brand out of Australia, so that's definitely something to keep an eye on as we move into the future.

Ryan, I just want to pause for a second and ask you to pick out a few deals that really stood out to you—ones that caught your interest or really characterized the year as a whole. Could you reflect on those? You can fire off a few or go one by one.

Ryan: There were probably two or three key themes in the M&A world last year. One was companies looking for growth—either acquiring or investing in brands with strong potential. Another was companies focusing their portfolios by divesting brands that were no longer core priorities. And finally, some deals were more opportunistic.

I'll start with one that I'm a little biased toward. Full disclosure—we advised BuzzBallz on their sale to Sazerac last year, and that was a fascinating deal from multiple angles. First of all, BuzzBallz is a phenomenal brand. What Merrilee Kick has done to build it is absolutely exceptional. And honestly, I’m still not sure how she pulled it off, especially considering that when she started, the term "RTD" didn’t even exist.

BuzzBallz is really a perfect representation of today’s RTD category. It’s hard to define because of its unique packaging, but the liquid inside can be any color or flavor—it’s completely adaptable to consumer trends. They can make it with any alcohol base, and they do. They sell a spirits-based version, a wine-based version, and a malt-based version. So they have a brand that can be customized for any flavor profile and sold in any channel—whether that channel is licensed to sell spirits, wine, or beer.

They also meet consumers at their price point in a convenient format. That makes BuzzBallz a great example of what’s happening in the RTD space. There are almost no rules. You don’t have to stick to a traditional flavor profile. A brand can offer cocktail flavors, fruit flavors, and even confectionery flavors all at once, and consumers will accept it.

Certain brands fit a specific profile—consumers see them as “canned cocktails” designed for particular occasions. But with brands like BuzzBallz, consumers are much more flexible. They don’t care what it looks like or how it’s categorized—if it fits the price point, occasion, and flavor profile they’re looking for, they’ll buy it.

So BuzzBallz is a fascinating brand. And if you look at the acquirer, Sazerac, that deal reflects another interesting trend from last year. The biggest acquirers of brands in 2023 were Gallo and Sazerac.

It was a year where the large, publicly traded, international spirits companies weren’t making many acquisitions. They were dealing with portfolio concerns, destocking issues, distributor and retailer challenges, and even management changes. There was a lot of internal and external volatility. Meanwhile, the two biggest private companies in wine and spirits—Gallo and Sazerac—stepped up and made some really interesting moves.

Gallo made several RTD and spirits acquisitions. Sazerac acquired BuzzBallz, which is super high-growth and super-premium. Then, just a few months later, they acquired Sebago Lake Distillery, which is a much simpler, less premium portfolio and not a high-growth brand.

Gallo and Sazerac have shown they have an appetite for both ends of the spectrum—they’ll acquire high-growth, founder-owned brands, but they’re also willing to buy corporate carve-outs from large suppliers and competitors. That’s an interesting microcosm of what’s happening in the industry right now.

Meanwhile, the big spirits companies were all dealing with different levels of internal distraction. They were rethinking their category strategies, reconsidering geographies, and reshaping their portfolios. But Gallo and Sazerac were out there making nimble, creative moves.

Another big theme last year was opportunistic or distressed deals. For example, Duckhorn went private again. That was a successful exit—they were a successful public company, but it’s tough to be publicly traded when you’re not at the scale of a Diageo, Molson Coors, or AB InBev.

On the flip side, Vintage Wine Estates struggled. I don’t think that was necessarily their fault, but being a small, publicly traded company is just hard. You have the demands of public shareholders, quarterly earnings pressures, and at the same time, you’re trying to be a high-growth, mid-sized company. That’s a difficult balancing act.

What’s also interesting is all the deals that didn’t happen last year. There was a lot of chatter about major spirits companies considering selling off certain brands. Some even explored it seriously. But most of those deals didn’t materialize.

I still think that mindset exists, though. As long as destocking trends and consumer uncertainty continue, big companies will keep evaluating their portfolios. If they can find the right buyer for a brand that’s no longer a priority, they might sell it off to refocus their organization on fewer, higher-potential brands.

So those were the three big themes I saw last year.

Emmett: Yeah, that’s great. And Merrilee Kick—a good friend of the podcast—we actually had her on about two weeks before they announced the deal. You would never have known it was coming from the way she spoke on the podcast.

She really does keep things close to the vest! And I couldn’t agree more—BuzzBallz is a brand that truly meets consumers where they are, both in terms of variety and the number of different drinking occasions it fits into. Totally agree—that was a great one to highlight.

You mentioned divestments and this broader trend of portfolio realignment and optimization. That was definitely a big theme last year. We saw it with Gallo, which you already brought up. We also saw it with Molson Coors—they focused on refining their portfolio by divesting four craft beer brands to Tilray while also making a few strategic investments.

And then we saw it with Pernod Ricard, which led the way in divestments last year, with three major strategic sales.

So I just want to pose this question to you: We might have alluded to it earlier with the macroeconomic factors at play, but in your view, why is this happening now? Why are all these major strategics so focused on going lean and optimizing their portfolios at this particular moment?

Ryan: There are a few key reasons, though I probably can’t capture them all. One major factor is industry consolidation. In both wine and spirits, we’ve seen significant consolidation at the retail and distributor levels. And as those tiers consolidate, suppliers have to adjust as well…

But the more you have different tiers of the industry consolidating, the more suppliers they are working with, and the more different retail distributors they are working with, it gets really hard to manage very large portfolios—especially to manage them all well. Some brands either end up experiencing lower growth and become less of a priority.

Some brands end up being too small. I think a lot of these big companies have realized that sometimes they’re very good at acquiring and growing smaller brands. Other times, they acquire a great brand, and it sort of gets lost in their system. Their systems are generally designed to handle very large, mega-brands.

So there's always a trade-off: should you have your people spending time on smaller, higher-growth, higher-profit brands? Or should they focus on larger brands? If a salesperson spends an extra hour on a large brand, that might result in selling 100 more cases. If they spend that hour on a smaller brand, maybe they sell 10 more cases—but at a higher margin. What’s the right long-term move?

Some of these companies are publicly traded, so they’re forced to think in shorter time periods because of pressure from investors, activists, and shareholders. So even if they wanted to keep Brand X for 20 more years, they have to ask: Do we have the time to do that? Should we make a move today? Would it be better to get rid of it and create a smaller portfolio that allows us to focus more on fewer brands? That way, we could spend more money on sales, marketing, and distribution to try to build those brands up.

I think interest rates and inflation are part of that equation, too. When you're spending more money on everything, you have to decide: Do we need to consolidate and refine our approach? Because it’s not always sustainable to manage that level of complexity. And I think that also ties into the destocking issue.

If you're a large spirits distributor with a certain amount of inventory in your warehouses—when you were paying 3% interest on your credit line to fund that inventory, that’s a lot different than paying 7% on a $2-3 billion credit facility.

So part of it has been forced by distributors and retailers saying, “Hey, we've got too much inventory. You need to figure out what you want us to sell because we can't keep taking on all these SKUs. It's costing us a lot of money to hold this inventory if it's not selling through.”

And ultimately, it's also the consumer. Consumers are telling companies which brands they’re really gravitating toward and which ones they’re moving away from. And that forces a decision point. If you're a brand owner, and the consumer is clearly buying these five brands but not the other two or three, you have to ask: How do I think about that?

So there are a lot of factors at play, and I think this goes in cycles. We see waves where acquirers go through crazy acquisition runs, buying a lot of things. Some work, some don’t. Then they reevaluate what’s working and what’s not. Then they start divesting some of those brands. And often, they divest too much—so they end up going back into another acquisition wave.

Right now, we’re in a cycle where, for several different reasons, companies are focusing more on divesting than investing.

Emmett:
I think that makes a lot of sense and was really well summed up.

Okay, so last year, we saw a lot of strategic multinationals making moves—whether through investment or divestment. But in terms of other types of buyers, what else did we see out there? Were there other types of companies getting involved in acquisitions?

Ryan:
Yeah, I think some new types of investors and buyers were getting involved, but some are still feeling their way through it.

We are seeing more demand from creative buyers—whether it’s international buyers that haven’t done much in the U.S. or even non-spirits and non-beverage companies thinking about whether they need exposure to the U.S. market or to the spirits category.

Some non-alcohol beverage companies are looking at their distributors—who are already selling alcohol—and their retailers—who sell both categories—and asking, “If it’s all the same supply chain, should we have a more active role in alcohol or spirits or certain subcategories?”

It’s still early stages for some of them, and not all are ready to dip their toe in yet. But we can tell you that there are multiple types of buyers—either from different geographies or from outside the beverage alcohol space—who are considering whether this is a category they should enter.

For those kinds of buyers, it takes time to decide if it’s the right strategy or to find the right opportunity to make a move. But the thought processes are definitely out there.

I wouldn’t be surprised if, in the next two to five years, we see another non-alcohol company make a significant move into beverage alcohol—or, frankly, the reverse. We’ve got a lot of alcohol companies looking at non-alcohol segments, whether it’s adult non-alcoholic beverages or more traditional non-alcoholic categories like soda, energy drinks, or hydration.

Everyone is looking for that next leg of growth and profitability. If they’ve already maxed out their opportunities within their existing world, it makes sense to consider crossing over into the other.

So I think a lot of people are currently looking at the edges. Maybe they won’t make a jump in 2025, but it may not be too far away.

Emmett:

And something that we've been tracking at Park Street University over the last couple of years is how small to medium-sized brands are making moves to solidify their presence in the market.

You think of Tanteo purchasing Ole Smoky in 2023. Even last year, Uncle Nearest made a move in this space as well.

So, do you think there’s a runway for these types of independent brands to continue making deals like that? Is this something we're going to see more of as we look to the future?

Ryan:

Yeah, I think we will.

I mean, part of that is a result of the big international companies not making a lot of moves. You’ve got some brands that, three or four years ago, probably would have considered selling to a Diageo or Pernod Ricard, but last year, that wasn’t an option for many of them. The bigger players weren’t looking for small or midsize brands—they had other priorities.

So, in that environment, if you’re a brand that wants or needs to find a partner, an acquirer, or an investor, you often end up turning to someone more unique—maybe a midsize player, someone more creative.

As long as the big acquirers aren’t as active in the market, we’re going to see more creative deals happening. Some brands will need an exit—maybe they’ve reached the end of their financial runway and have to sell. Others may have owners looking to retire or dealing with succession planning issues.

And while these buyers may not pay the same eye-watering multiples as a Diageo or Pernod, you can still find a good exit. You can find someone who has more resources, infrastructure, and spending power to grow your brand.

So, for founders, it can still be a great option. I think it's part necessity and part opportunity—some of these creative buyers see a chance to acquire brands they wouldn’t have been able to afford in a more competitive market.

And sometimes, founders prefer to sell to a midsize or smaller company because they feel it’s better for their employees, community, and company culture. Other times, it's just the reality of the market—the bigger buyers aren’t interested, so you go with the best available option.

Emmett:

I want to bring up one specific deal from last year that stood out to me. Toward the end of the year, we saw Constellation Brands offload Svedka to Sazerac.

How would you characterize what that says about the vodka category at this point in time?

Ryan:

Constellation is a really interesting case study. They have a phenomenal beer portfolio—arguably the most enviable in the U.S. It’s super efficient, high growth, high velocity. Distributors and retailers love working with them because it’s the easiest portfolio to sell in the U.S.

Now, they also have some strong wine and spirits brands, but over the past three to four years, it’s become clear—especially to Wall Street and the investor market—that their primary focus is beer. That’s where the real growth is, and that’s where most of the profit comes from.

So, I think Constellation has been looking at how to maximize its opportunities. And it’s pretty apparent that at least part of their wine and spirits portfolio has been a distraction—maybe even a drag.

Some of those brands just aren’t growing. Svedka, for example, is in a tough spot. No one wants to go head-to-head with Tito’s in the vodka category. That’s a hard battle for any brand, just given how dominant Tito’s is.

That said, Svedka is still a great brand. And Sazerac is a buyer that excels at acquiring brands that may not have had the best home under their previous owner. They take those brands, put them into their system, and give them the right level of attention, priority, and strategy.

So, I think this deal made sense for both parties. Constellation gets cash proceeds and can focus on its stronger brands, while Sazerac gets a brand they can integrate into their portfolio and potentially grow.

I wouldn’t say I saw this deal coming, but after it was announced, it wasn’t all that surprising.

Emmett:

One of the big themes last year was the impact of premiumization. As you mentioned earlier, that really drove a lot of the activity we saw.

Looking ahead, do you think premiumization will continue to influence M&A in the spirits industry as it has in the past few years?

Ryan:

I think the runway for premiumization is still long.

In the last few years, we’ve seen a bit of a bifurcation—where the really high-end products continue growing, while some mid-tier products are getting squeezed. We’ve definitely seen that in beer, in wine to some extent, and now in spirits.

But if you take a long-term view—looking at the past 20 to 40 years—premiumization has been a consistent trend across all beverage alcohol categories. Beer has become more premium. Spirits have become more premium. Wine has as well.

This trend also ties into larger demographic and societal shifts.

I don’t know if we’ll always see $300 bottles of tequila as the fastest-growing category—that was somewhat of an anomaly during COVID. People weren’t going out as much, so they splurged on more expensive options at home.

But overall, premiumization is moving upward. It’s not always linear, but the trajectory is clear.

Consumers today are drinking slightly less but opting for better-quality products. They value affordable luxuries, better-tasting options, and brands that offer a certain level of prestige or “badge value” when they’re out with friends or colleagues.

So, I don’t see any reason for that to change.

Emmett:

Yeah, and the data really supports that. While premiumization has moderated somewhat, the higher price tiers of the industry are still driving growth.

Shifting gears a bit—when you look ahead to 2025, what trends do you think will shape M&A in the spirits industry? Based on what we saw in 2024, what should we expect moving forward?

Ryan:

Forecasting the future is always a bit murky, but I’m hopeful that this year brings a greater sense of normalcy.

I think inventory destocking will become less of an issue in spirits as the year goes on.

RTDs (ready-to-drink cocktails) will continue to be a big area of interest. Many of the natural acquirers in that space are still figuring out their strategy, but they all know they need one. RTDs have become too big to ignore.

If you look at brands like High Noon, White Claw, or Twisted Tea, they’re massive and still growing. Consumers care less about the technicalities of alcohol classification than we do. So, every major player knows they need an RTD strategy—it could involve M&A, innovation, or line extensions, but they have to do something.

Beyond that, I hope we’ll see more premium brand deals. We haven’t seen a lot of major premium spirits acquisitions lately—aside from deals like Casamigos, Aviation Gin, and Penelope Bourbon. Hopefully, we’ll start seeing those types of transactions again.

That said, for high-growth premium deals to happen, acquirers need confidence in the consumer landscape. And right now, there’s a lot of disruption in the spirits distribution world, which creates uncertainty.

If you’re trying to justify a multi-hundred-million-dollar acquisition, but you’re unsure what your distribution network will look like in nine months, that makes it tough to pull the trigger.

So, while I’m cautiously optimistic, that uncertainty is something to keep an eye on.

Emmett:

To wrap this up—if brands want to position themselves for a potential deal in 2025, what are some best practices they should keep in mind?

Ryan:

There are a few key things:

• Have clean legal and tax structures.
• Maintain solid financial accounting—doesn’t have to be audited, but your numbers should be reliable.
• Protect your intellectual property—ensure your trademarks are in place and enforced.
• Have enough capital to sustain a sale process, which can take 6 to 12 months.

Ultimately, put yourself in the buyer’s shoes. Understand your customer, your brand’s strengths, and your challenges. The more you can demonstrate value, the better your position.

Emmett:

That’s great advice.

We’re going to wrap it up there. Be sure to check out Park Street’s M&A report on the Park Street University blog—we’ll link it in the show notes.