In 2025, the U.S. alcoholic beverage industry once again experienced a sobering period of development, with the industry landscape showing distinct signs of transformation under the combined influence of economic conditions and trade dynamics.
According to the latest data released by the Distilled Spirits Council of the United States (DISCUS), U.S. spirits suppliers saw a 2.2% year-on-year decrease in revenue in 2025, ultimately falling to $36.4 billion. The core reasons for the revenue decline were attributed to increased economic pressure and persistently weak consumer confidence, which together suppressed discretionary spending. As a non-essential consumer good, alcohol consumption was naturally affected.
Chris Swonger, CEO and President of DISCUS, stated in a press release, "Despite a slight 2.2% decrease in overall U.S. spirits sales in 2025, the spirits industry remains resilient."
Notably, total U.S. spirits sales in 2025 increased by 1.9%, reaching 318.1 million cases (each case containing 9 liters). This data indicates that market demand for spirits did not shrink, but rather experienced slow growth. However, the inverse relationship between revenue and sales clearly shows that Americans' drinking habits are changing – they are not reducing their drinking frequency, but are generally opting for lower-priced spirits and reducing their purchases of premium spirits.
In terms of category performance, almost all major spirits categories failed to avoid revenue declines in 2025. Vodka sales decreased by 3% year-on-year to $7 billion; tequila and mezcal, which had been industry growth engines for many years, also saw a 4.1% decline in sales, reaching $6.4 billion; U.S. whiskey and liqueurs showed relatively milder revenue performance, but still experienced year-on-year decreases of 0.9% and 3.2%, respectively.
In the overall sluggish market environment, convenience and value for money became the only points of breakthrough, with related subcategories showing strong growth momentum.
An Optimistic Final Call
Ready-to-drink (RTD) cocktails (encompassing all types of ready-to-drink beverages with a spirits base) became the biggest highlight of the US alcoholic beverage industry in 2025, with sales increasing by over 16% year-on-year, reaching $3.8 billion. In fact, since 2021, as consumer spending habits have shifted towards value for money and a preference for more convenient drinking options, this category, often referred to as RTD, has doubled its market share, becoming one of the core drivers of industry growth.
The tequila sector also showed a clear trend of consumer downshifting, as macroeconomic headwinds led consumers to reconsider the necessity of purchasing high-end brands, opting instead for more affordable products. According to industry association tracking data, sales of the lowest-priced tequila/mezcal increased by 6.5% year-on-year in 2025, while sales in the next lowest price bracket also saw a 2.8% increase. In stark contrast, sales of whiskey, vodka, rum, and gin in the same price ranges all experienced varying degrees of decline.
This shift in consumer trends has also reshaped the competitive landscape within the industry. As consumers gravitate towards more affordable spirits products, leading companies such as Diageo and Brown-Forman have positioned themselves advantageously through precise strategic planning – both holding the largest market share in low-priced tequila and the rapidly growing ready-to-drink (RTD) beverage sector. Specifically, Diageo owns the Casamigos tequila brand and has built a vast portfolio of spirits-based ready-to-drink beverages; Brown-Forman controls core mid-to-low-priced tequila brands such as El Jimador, firmly securing its advantage in the downshifting consumer market.
On the other hand, beer giants such as AB InBev and Molson Coors, while actively expanding their ready-to-drink beverage portfolios to seize industry growth opportunities, have failed to fully benefit from the consumer downshifting trend due to their weak presence and extremely low market share in the tequila sector. Constellation Brands, which owns the Modelo and Corona brands, is in a somewhat unique competitive position – it has a mature beer business and is also involved in the tequila sector, but its ready-to-drink beverage business is relatively small and has not yet formed synergistic advantages.
Overall, after years of rapid industry growth driven by the pandemic, the global alcoholic beverage market has entered a slowdown phase. The latest data from DISCUS further confirms that this market normalization trend is shifting towards contraction, and the US alcoholic beverage industry is no exception.
Trevor Stirling, a European and US beverage analyst at Bernstein, said: “The data released by companies that have already reported earnings is weak, but not beyond expectations. The rate of decline has not accelerated, and may even be slowing down, and people can expect sales to recover.”
Ongoing Trade Tensions
In addition to changes in the domestic consumer market, US brewers are also facing numerous adverse factors in overseas markets. Due to the ongoing global trade tensions and the impact of tariffs imposed by former US President Donald Trump on Canada last year, which led many Canadian retailers to remove US alcoholic beverages from their shelves, US spirits exports fell by 9% year-on-year in the second quarter of 2025, putting pressure on overseas market performance.
Industry insiders generally believe that the uncertainty of tariff policies seriously affects companies' long-term planning, leading brewers to be cautious in their overseas market strategies and making it difficult to form stable development expectations.
“The uncertainty of global trade issues continues to put heavy pressure on the US spirits industry,” said Swanger. “Restoring zero tariffs on distilled spirits must be a top priority to enable US brewers to return to growth and prosperity.”
Although US spirits industry revenue declined in 2025, spirits still maintain a leading position in the overall alcoholic beverage market. Data shows that spirits have a market share of 42.4%, while beer and wine have market shares of 41.8% and 15.7% respectively, indicating that the industry dominance of spirits remains unshaken.
However, the signals from the US alcoholic beverage industry in 2025 are clear: consumers are drinking less overall, but their consumption preferences are more discerning and rational. Against the backdrop of a challenging economic environment, lower-priced tequila and canned cocktails are proving more popular than high-end bottled spirits in bars and other consumption settings. This trend is expected to continue influencing the future direction of the U.S. alcoholic beverage industry.
