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US spirits face ‘challenging’ 2025
Spirits sales from wholesalers to retailers in the US are expected to continue declining during the first half of 2025 as premiumisation slows down.
Data from the Wine & Spirits Wholesalers of America (WSWA), which looked at sales from wholesalers to more than 450,000 retailers nationwide, noted negative trends for spirits in 2024 are expected to continue into 2025.
Based on WSWA’s data sources, the spirits sector is expected to decrease by 5.65% for the 2024 full year.
For the 12 months to the end of June 2025, this decline is expected to stabilise at 5.6%.
The downturn follow sales highs for the spirits sector during Covid-19, marking an ‘unprecedented departure’ from pre-pandemic gains in 2019, WSWA said.
Michael Bilello, WSWA’s executive vice-president of communications and marketing and director of SipSource, said 2025 would be “another challenging year” for the spirits sector.
SipSource said its previous forecast for the category, released in January this year, correctly predicted declines for the first half of 2024, with almost 90% accuracy for core spirits.
Forecasts from SipSource also highlight a move towards ‘affordable luxury’, driven by the US$17-US$24.99 and the US$25-US$49.99 price tiers, as drinkers jump ship to less expensive subcategories.
“We have seen premiumisation trends stall in key spirits categories, which have been ongoing for over a decade and peaked during the Covid era,” said SipSource analyst Dale Stratton.
SipSource believes vodka will decline in a similar way to the total spirits category, with a 5.15% drop estimated for the 2024 full year, and a 4.4% fall for the 12 months to the end of June 2025.
American whiskey is predicted to struggle even more with a decrease of 6.8% expected in the year to June 2025.
SipSource analyst Danny Brager attributed the downturn to the “regression to pre-pandemic consumption levels, broader economic challenges [and] the growing popularity of ready-to-drink cocktails”, as well as the rise of substitutes such as cannabis and the move towards alcohol moderation.
The WSWA does not expect macroeconomic trends such as inflation to have a “significant” effect on its projections.
According to data from IWSR Drinks Market Analysis in June, spirits declined by 2% in volume in the US in 2023, the first dip in the category in almost 30 years.
Spirits volumes in the US dropped by 3% in the first seven months of 2024, led by decreases for Tequila and American whiskey.
IWSR recently noted that the performance of rum in the US has been ‘underwhelming’ in recent years due to a lack of premiumisation.
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