Brewing Industry Sees 43% Drop in Product Registrations

June 15, 2020

Brewers are bringing fewer new products to market amid coronavirus concerns and a slowing economy, according to Sovos ShipCompliant label registration data for the months of April and May 2020, indicating these producers are doubling down on their existing product lines.

Overall, producers and wholesalers in the beer, wine and spirits business registered 16,164 products through Sovos ShipCompliant’s Product Registration Online (PRO) system, while many bars, retailers and tasting rooms remained closed due to stay-at-home orders. This represents a drop of 2% over February and March and a 0.3% decrease year-over-year.

However, brewers felt the decline most sharply with 43.4% fewer new product registrations in April and May compared to the same time last year.

“The closure of tasting rooms beginning in mid-March left many industry producers struggling to make ends meet. Breweries, in particular, appear to have rallied around their core products rather than investing in seasonal or limited releases, as a way to cut costs,” said Larry Cormier, vice president, general manager of Sovos ShipCompliant. “Craft beer innovation takes place in the taproom. With limited retail shelf space, many newer brewers focus on taproom sales rather than traditional distribution. So when tasting rooms closed, the newest and smallest brewers took the biggest hit.”

Carbonated wine, hard seltzers and spirits less affected

In recent years, hard seltzers have skyrocketed in popularity with more than 203 new labels registered at the federal level since 2016. These products, along with premixed wine coolers, make up nearly 60% of all malt beverages registered in 2020 – compared to 40% last year. However, registrations of special malts are only down 15.7% year-over-year, compared to 43% for the overall malt category, indicating sustained momentum in this category despite the coronavirus.

Carbonated wine as a category is also bucking the downward registration trend. Product registrations for carbonated wine soared in the past two months, up an astounding 33 times over the same period last year. By comparison, sparkling wine decreased by 2%, red table and rose wines saw a 13% increase, and table white wines grew by 11%.

Spirits are also doing relatively well with an overall 38% increase year over year. Registrations for rum, gin, tequila and whiskey products are up 240%, 120%, 40% and 25% whereas registrations for vodka products are down 12%, respectively.

Sovos ShipCompliant offers the industry’s most advanced system for electronic brand registrations for beer, wine and spirits. The Sovos ShipCompliant Product Registration Online (PRO) system is available in more than 20% of the county, including Arkansas, Colorado, Illinois, Kentucky, Louisiana, Minnesota, New Mexico, New York, Oklahoma, South Carolina, and South Dakota.

Using PRO’s online submission and approval system, manufacturers and wholesalers typically see their approval wait times drop from weeks to hours in many cases, expediting their ability to introduce new beer, wine and spirits products into the marketplace.

To learn more about Sovos ShipCompliant’s solution for product registrations, visit http://www.sovos.com/shipcompliant/.

About Sovos ShipCompliant
ShipCompliant has been the leader in automated alcohol beverage compliance tools for more than 15 years, providing a full suite of cloud-based solutions to wineries, breweries, distilleries, importers, distributors and retailers to ensure they meet all federal and state regulations for direct-to-consumer and three-tier distribution. ShipCompliant’s solutions reduce risk, lessen the burden of compliance, accelerate bringing products to market, and enable revenue growth. With 60 partner integrations and growing, ShipCompliant leads a robust ecosystem of technology partnerships, enabling powerful complementary solutions. For more information, please visit Sovos.com/ShipCompliant.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Additional Press Releases

North America VAT & Fiscal Reporting
December 16, 2020
Sovos Highlights 4 Tax Compliance Megatrends Facing Multinational Companies

12th Edition of Annual Trends Report Puts Spotlight on Current and Near-term Legal Requirements Across Regions and VAT Compliance Domains BOSTON, December 16, 2020 – Global tax software leader Sovos today released its report on global value-added tax (VAT) mandates and compliance. The report, “VAT Trends: Toward Continuous Transaction Controls” provides a comprehensive look at the regulatory landscape as […]

Read More
December 8, 2020
Sovos Acquires LTtax, Strengthening Automated Tax Withholding Offerings

Acquisition brings leading withholding technology to largest private filer of 10-series IRS forms. BOSTON (PRWEB) December 08, 2020 – Global tax software provider Sovos today announced it has acquired LTtax, a New York-based provider of payroll withholding and unemployment tax software serving some of the largest retailers, financial institutions and insurers operating in the United States. The […]

Read More
December 1, 2020
Sovos’ Global Tax Determination 8.8 Achieves SAP® Certified Integration with SAP S/4HANA®

As the digitization of tax continues to raise compliance stakes worldwide, businesses need a complete solution for real-time tax calculation that supports them everywhere they do business BOSTON (PRWEB) December 01, 2020 – Global tax software leader Sovos announced today that its Global Tax Determination version 8.8 solution has achieved SAP® certification as integrated with SAP S/4HANA® […]

Read More
November 24, 2020
Sovos and Axway Software Partner to Reduce Complexity of Global Tax Management

Sovos’ global solution for tax determination, continuous transaction control compliance and tax reporting reduces the potential risk associated with regional providers for Axway Customers BOSTON (PRWEB) November 24, 2020 – Global tax software provider Sovos today announced it has entered into a strategic partnership with Axway, a leading provider of API management and enterprise integration platform. By incorporating Sovos […]

Read More
November 23, 2020
Cryptocurrency Leader Bitstamp Selects Sovos for Tax Information Reporting

Sovos automation technology will provide 1099 forms and more to ensure crypto tax reporting compliance as virtual currency scrutiny increases BOSTON (PRWEB) November 23, 2020. Global tax software leader Sovos today announced that cryptocurrency exchange Bitstamp has selected Sovos for its 1099 crypto tax information reporting needs. As virtual currency scrutiny grows at the IRS, the company will […]

Read More