This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
News
Tequila and RTDs keep US spirits industry afloat
The annual Distilled Spirits Council of the US (Discus) economic briefing painted the US spirits industry as resilient, but warned of tariff-related challenges ahead.
Yesterday (11 February) Discus released its Annual Economic Briefing, sharing data that shows the industry has more or less remained level, despite economic challenges and shifts in spending.
In 2024, spirits supplier sales were down by 1.1% in 2024, while volumes rose by 1.1%.
Growth was primarily fuelled by spirits-based RTDs, which increased sales by 16.5% or US$468 million. The category is the fourth largest in the US, totalling US$3.3 billion in revenue.
Tequila and mezcal grew by 2.9% to US$6.7 billion, while vodka stayed flat at US$7.2 billion, and American whiskey dipped by 1.8% to US$5.2 billion.
“While the spirits industry has proven to be resilient during tough times, it is certainly not immune to disruptive economic forces and marketplace challenges, and that was definitely the case in 2024,” Discus president and CEO Chris Swonger said.
“Consumers were contending with some of the highest prices and interest rates in decades, which put a strain on their wallets and forced many to reduce spending on little luxuries like distilled spirits.”
In 2024, the spirits sector maintained its market share lead for the third consecutive year, clocking in at 42.2% compared with 42% for beer. In 2000, spirits had a 28.7% market share while beer was at 55.5%.
While the industry continues to face headwinds with more potentially on the horizon, and the market continues to level out after a pandemic-related spike, the long-lens outlook is positive. In 2014, total spirits revenue was US$23.2bn. By 2019 it had risen to US$29bn, and in 2024 it was US$37.2bn (although this was down by 1.1% compared with 2023).
Combatting tariffs
Discus used the briefing to recap its efforts in the previous year, and state its policy agenda for 2025, which includes continuing to advocate for the permanent suspension of retaliatory tariffs on spirits.
The trade body warned of the harm a 50% tariff on American whiskey by the EU would cause were a new resolution not reached by 31 March. The initial tariffs stem from steel and aluminium trade disputes dating back to the previous Trump administration, which led to American and European spirits being pulled into the fray.
On 10 February 2025, president Donald Trump signed a new 25% tariff on all steel and aluminium imports.
While the tariffs were suspended, US spirits exports soared. In 2024, the EU was the top export market for US distilled spirits, totalling US$883 million.
The next highest was Canada with US$262m. The EU also led American whiskey exports at US$705m with Australia second at US$121m.
“Since the suspension of the EU’s tariffs on American whiskey, our exports have rebounded to record highs,” Swonger said. “The reimposition of these tariffs at a 50% rate would gut this growth and do irreparable harm to distillers large and small.
“It would be a catastrophic blow that will force many distillers out of our largest export market.”
Dr Sonat Birnecker Hart, president and founder of Koval Distillery in Chicago, spoke during the briefing, representing domestic craft distillers who rely on export markets to grow. She said brands like hers need to commit resources into establishing their position in foreign markets and developing relationships with distributors there.
“Once you’re off the shelf, it is 1,000-times more difficult to get back on,” Hart said. “Many craft distillers have expended great time, effort and resources to expand into international markets only to see their dreams shattered by tariffs that have absolutely nothing to do with our industry.”
Other policy initiatives on Discus’s agenda include fairer treatment and increased retail access for RTDs, and expanding marketplace modernisation, including cocktails-to-go and direct-to-consumer shipping.
Related news
Tariffs up for discussion on day three at The SB Hub