Various cans of ready-to-drink alcoholic beverages, including Captain Morgan’s rum and cola; the Bacardi mango mojito; Archers’ schnapps and lemonade; Malibu pineapple and piña colada cocktails; and Gordon’s gin and tonic cocktails, are displayed for sale in a supermarket on January 10, 2024.
John Keeble | Getty Images
The U.S. alcohol industry had another sobering year in 2025.
Revenue for spirits suppliers fell 2.2% to $36.4 billion for the year, according to new data from the trade group Distilled Spirits Council of the United States, or Discus. The decline came as economic pressure and declining consumer confidence weighed on discretionary spending.
“Even though total U.S. spirits sales declined slightly by 2.2% in 2025, the spirits industry remains resilient,” Chris Swonger, CEO and president of DISCUS, said in a statement.
Overall volumes for the year increased by 1.9% to 318.1 million 9-liter cases, indicating growing demand. But falling incomes suggest that even as Americans continue to drink, they are also downselling, opting for cheaper spirits and forgoing high-end purchases.
Almost all major spirits categories saw revenue declines. Vodka sales fell 3% to $7 billion. Sales of tequila and mezcal – the industry’s fastest-growing segment for several years now – fell 4.1% to $6.4 billion. Revenues from American whiskey and cordials decreased by 0.9% and 3.2%, respectively.
The exception was convenience and value.
Last call for optimism
Sales of premixed cocktails, including spirits–based on ready-to-drink beverages, jumped more than 16% from the previous year, reaching $3.8 billion. The category, known as RTD, has more than doubled its market share since 2021 as consumers shift to a lower price point.
Within tequila, the shift has also been toward more affordable bottles, as macroeconomic headwinds prompt consumers to rethink splurging on premium brands. Volume at the lowest tequila/mezcal price tier tracked by the trade group increased 6.5% in 2025, along with a 2.8% increase at the next higher tier. Volumes of whisky, vodka, rum and gin have all fallen at these price levels.
As consumers turn to more affordable spirits, companies like Diageo And Brun-Forman could be best positioned, as they have the most exposure to low-cost tequila and the rapidly growing RTD category. Diageo owns Casamigos tequila and has built up a significant portfolio of ready-to-drink spirits, while Brown-Forman controls key mixed-price tequila brands like El Jimador.
On the other hand, big beer players like AB InBev And Molson Coors have minimal exposure to tequila, although they have expanded their RTD portfolios. Owner of Modelo and Corona Constellations Brands in a unique position with exposure to beer and tequila, but a smaller RTD footprint.
Overall, the alcoholic beverage market has slowed after years of pandemic-fueled growth, and the new data from DISCUS reinforces that normalization is now turning into contraction.
“The companies that have started to release numbers are showing weak numbers, but not worse than expected,” said Trevor Stirling, European and U.S. beverage analyst at Bernstein. “The rate of decline is not getting worse, it could slow down and we can dream of a return to volume growth.”
Persistent trade tensions
Distillers have also faced headwinds overseas. U.S. spirits exports fell 9% year-on-year in the second quarter of 2025, amid ongoing trade tensions and the removal of U.S. products from many Canadian retail shelves following President Donald Trump’s tariff hikes on the U.S. neighbor last year.
Industry executives say pricing uncertainty makes long-term planning difficult.
“The unpredictability surrounding global trade issues continues to weigh heavily on the U.S. spirits industry,” Swonger said. “Reinstating zero-for-zero tariffs on distilled spirits must be a priority to put our American distillers back on the path to growth and prosperity.”
Despite the drop in revenue, spirits maintained its market share of the total alcoholic beverage market at 42.4%, compared to beer and wine at 41.8% and 15.7%, respectively.
However, the message from 2025 is clear: consumers are drinking less, but those who still drink are more selective. In a tougher economic environment, cheaper tequila and canned cocktails trump premium bottles behind the bar.