A vendor holds up a bottle of Casamigos, tequila from Diageo, the world’s main spirits maker, at a liquor retailer in Monterrey, Mexico, on Dec. 10, 2024.
Daniel Becerril | Reuters
The U.S. spirits trade maintained its market share management over beer and wine for a 3rd straight yr in 2024, whilst revenues slid, in accordance with new knowledge launched Tuesday.
Spirits provider gross sales within the U.S. fell 1.1% final yr to a complete of $37.2 billion, whereas volumes rose 1.1%, in accordance with the annual U.S. financial report from the Distilled Spirits Council, a number one commerce group.
That’s the first time income for the spirits class has fallen in additional than twenty years. Regardless of a return to extra typical shopping for patterns after a pandemic increase, spirits revenues have grown a median 5.1% yearly since 2019. Between 2003 and 2019, the common annual progress fee was 4.4%.
“Whereas the spirits trade has confirmed to be resilient throughout powerful occasions, it’s definitely not proof against disruptive financial forces and market challenges, and that was positively the case in 2024,” stated DISCUS President and CEO Chris Swonger.
Tequila and mezcal remained a vivid spot for the yr as the one spirits class exhibiting gross sales progress, as income climbed 2.9% to $6.7 billion.
Prime 5 spirits classes by income in 2024:
- Vodka: $7.2 billion (flat from prior yr)
- Tequila/mezcal: $6.7 billion (up 2.9%)
- American whiskey: $5.2 billion (down 1.8%)
- Cordials: $2.8 billion (down 3.6%)
- Premixed cocktails together with spirits RTDs: $3.3 billion (up 16.5%)
Premixed ready-to-drink cocktails grew double digits, however the class consists of numerous forms of combined spirits together with vodka, rum, whiskey and cordials.
The Mexico tariff risk
Mexican spirits and beer have grown extra well-liked with shoppers for over twenty years, and tequila and mezcal gross sales outpaced American whiskey for the primary time in 2023.
The highway forward for the Mexico-based merchandise stays unsure. The Trump administration earlier this month delayed imposing tariffs on imports from Mexico — which would come with distinctive merchandise equivalent to mezcal and tequila — by one month whereas tariff negotiations proceed.
“These tariffs have wreaked havoc on our craft distilling neighborhood,” stated Sonat Birnecker Hart, president and founding father of KOVAL Distillery in Chicago. “Many craft distillers have expended nice time, effort and assets to broaden into worldwide markets solely to see their desires shattered by tariffs which have completely nothing to do with our trade,” Hart added.
Swonger additionally famous that tariffs could be a “catastrophic blow” to distillers and solely add to the stress increased rates of interest have placed on the trade’s provide chain, as wholesalers and retailers proceed to deplete stock buildups and cautiously restock merchandise.
“Shoppers had been contending with a number of the highest costs and rates of interest in a long time, which put a pressure on their wallets and compelled many to scale back spending on little luxuries like distilled spirits,” stated Swonger.
“Our gross sales dipped barely however shoppers continued to decide on spirits and revel in a cocktail with household and pals,” he stated.
