U.S. spirits market forecast shows stabilization after years of decline with tequila leading modest growth

SipSource has released its latest quarterly forecast for the U.S. spirits market, providing new projections for rolling 12-month case depletion growth rates through the second quarter of 2026. The data, powered by machine learning and artificial intelligence, draws from a comprehensive industry dataset and offers detailed insight into consumption trends across all core spirits and seven major categories.

According to the new forecast, the sharp declines that have affected key spirits categories since 2022 are expected to stabilize by the end of 2025. Total core spirits are projected to reach their lowest point at a -4.56% growth rate by late 2025, with a slight improvement to -4.09% by mid-2026. This marks a shift from the steeper negative growth seen in recent years.

The report highlights that categories such as rum, U.S. whiskey, vodka, and brandy/cognac, which have experienced significant downturns, are likely to see these declines flatten out during the first half of 2026. While these categories will remain in negative territory, the pace of decline is expected to slow considerably.

Tequila and other agave-based spirits stand out as an exception to the broader trend. After several years of rapid growth followed by a slowdown, this category is forecasted to stabilize near +1% rolling 12-month growth by mid-2026. The continued interest in premium tequila products priced between $20 and $100 is credited with supporting this modest increase.

Danny Brager, an analyst at SipSource, commented on the findings, noting that the flattening of negative growth curves could indicate that the market is reaching a turning point. He said this transition period may offer some optimism for producers, distributors, and retailers as they plan for future business strategies.

The SipSource forecasting model was developed in partnership with consulting firm Kearney and has demonstrated high accuracy as more data becomes available. Short-term forecasts for the first quarter of 2025 were over 90% accurate across all classes, while one-year projections made in January 2024 have maintained an accuracy rate of 80%. This track record reinforces SipSource’s reputation as a reliable source for forward-looking industry analysis.

The quarterly forecasts provide detailed projections not only for overall core spirits but also for each major category and price tier. The model also incorporates adjustments for potential disruptions related to changes in U.S. trade policy, reflecting possible market volatility in its more pessimistic scenarios.

SipSource’s latest update comes at a time when many in the beverage alcohol industry are seeking clarity after several years of unpredictable consumer behavior and shifting market dynamics. The new data suggests that while challenges remain—especially for traditional categories like whiskey and vodka—the worst of the declines may soon be over, with some segments showing early signs of recovery or stabilization heading into 2026.