Welcome to Issue #5 of The Quench Report, the Beverage Alcohol newsletter that gives you liquid courage.

What’s on tap for today:

• 🚚 Celsius x Pepsi = Power Couple Energy

• 🍷 Pernod Ricard - FY’25 results thoughts

• 🍎 Cider comeback? Let’s talk bubbles or a lack thereof

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WHAT’S ON TAP THIS WEEK

• Sept 2: Barclays Global Consumer Staples Conference

• Sept 3: July JOLTS Jobs Data (openings and labor turnover)

• Sept 4: August Jobs Report (jobs added/lost, unemployment rate)

• Sept 10: U.S. Census update on Beer, Wine & Spirits Inventory

• Sept 11: CPI Data

🥤 CELSIUS HOLDINGS AND PEPSICO FORGE DEEPER RELATIONSHIP

It was just a matter of time… bigger than even Taylor and Travis’s announcement last week, on Friday, Celsius and Pepsi announced a “strengthened long-term strategy partnership”. The most interesting aspect of the deal was the announcement that Alani Nu would be moving from the beer distribution network to the Pepsi network.

Why does this matter?
Because, as we reported a few weeks ago, for aligned distributors, Alani was likely growing multiple times faster than the entire high-growth spirits RTD category, and that growth is now gone👇

So why make the change?

Celsius says: more reach, more distribution, more shelf space. Check the slide that they dropped on Friday 👇️ 

Is a projected 10% distribution gain in the largest channels worth the disruption? We will find out.

We realize for many readers who are deep into Bev-Alc, Pepsi doing a deal with an Energy brand doesn’t seem relevant, but days like Friday cause ripples that are felt for decades across all beverages:

• 📉 Aligned beer distributors race to find/focus on something to replace growth

• 🍸️ NA brand terms in Bev-Alc distributors might start to look a little different

• 🚚 Competing brands work to take advantage of any disruption to Alani

• 🏃‍♀️ KDP/Coke make moves to strengthen their RTMs - KDP is certainly racing to own as much of their DSD business as possible

• ♻️ Could this accelerate consolidation across the Bev-Alc RTM? including w/s houses?

It’s all connected. When Coke flaps its wings in New York, RTDs feel the storm in SoCal three years later.

🍷 PERNOD RICARD - FY’25 RESULTS

On Thursday, Pernod Ricard announced their FY’25 Sales and Results for the Fiscal Year ended June 30th, 2025. Results generally beat expectations, with positive volume growth, (3%) organic net sales decline, and strong FCF generation of $1.1B.

What caught our eye:

🥇 This killer visual 👇

It’s been a wild few years (Covid, re-openings, inventory whiplash), but this slide shows volumes are finally leveling off (maybe not just for PR but for the entire industry?) 👇️ 

🥈 New U.S. Commercial Divisions

• 🥫RTD-Specific Division - Focused on grabbing the surging RTD wave - added beer distributors to their existing wine/spirits network, including Reyes and Crescent Crown.
  

• 🆕GEM Division - Incubates and scales new brands by blending wine/spirits and a broader set of beer distributors.

Our take: The lines are blurring fast. In 10 years, will anyone still say “beer” or “wine/spirits” distributor? (We're betting no.)

🍎 CIDER - WHY IS IT GROWING AGAIN?

It’s been 10 years since the peak of hard cider, and since then, it’s been a slow and steady decline. 👇

But guess what? There’s a whisper of growth again—low single digits, but it’s there.

Some say it’s the gluten-free appeal.
We say: it’s the bubbles. 🫧 

🍾 Cider works with low or even no carbonation. Beer can’t say the same. And as more consumers lean toward lighter, less carbonated options, cider’s quietly carving a lane.

Opportunity alert for cider brands: Talk more about carbonation! It might be your secret weapon.

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