Tequila, mezcal are the only spirits growing in sales, but tariffs would be ‘catastrophic,’ industry group says

The U.S. spirits industry maintained its market share management over beer and wine for a 3rd straight yr in 2024, at the same time as revenues slid, in keeping with new knowledge launched Tuesday.

Spirits provider gross sales in the U.S. fell 1.1% final yr to a complete of $37.2 billion, whereas volumes rose 1.1%, in keeping 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 greater than 20 years. Regardless of a return to extra typical shopping for patterns after a pandemic increase, spirits revenues have grown a mean 5.1% yearly since 2019. Between 2003 and 2019, the common annual development price was 4.4%.

“Whereas the spirits industry has confirmed to be resilient throughout powerful instances, it’s actually 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 only spirits class displaying gross sales development, as income climbed 2.9% to $6.7 billion.

High 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, but the class consists of numerous sorts of blended spirits together with vodka, rum, whiskey and cordials.

Mexican spirits and beer have grown extra in style with customers for over 20 years, and tequila and mezcal gross sales outpaced American whiskey for the first time in 2023.

The street forward for the Mexico-based merchandise stays unsure. The Trump administration earlier this month delayed imposing tariffs on imports from Mexico — which would embody distinctive merchandise corresponding to mezcal and tequila — by one month whereas tariff negotiations proceed.

“These tariffs have wreaked havoc on our craft distilling group,” stated Sonat Birnecker Hart, president and founding father of KOVAL Distillery in Chicago. “Many craft distillers have expended nice time, effort and assets to increase into worldwide markets only to see their goals shattered by tariffs which have completely nothing to do with our industry,” Hart added.

Swonger additionally famous that tariffs would be a “catastrophic blow” to distillers and only add to the strain increased rates of interest have placed on the industry’s provide chain, as wholesalers and retailers proceed to deplete stock buildups and cautiously restock merchandise.

“Shoppers had been contending with a few 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 but customers continued to decide on spirits and revel in a cocktail with household and mates,” he stated.