U.S. spirits market forecast shows stabilization after years of decline with tequila category remaining resilient

SipSource released its latest quarterly forecast update for the U.S. spirits market on June 9, 2025, providing new projections for rolling 12-month case depletion growth rates through the second quarter of 2026. The report uses machine learning and artificial intelligence to analyze the industry’s most comprehensive dataset, offering detailed insight into future consumption trends across all core spirits and seven major categories.

According to the new data, the sharp declines that have affected key spirits categories since 2022 are expected to stabilize by the end of 2025. The total core spirits segment is projected to reach its 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 previous 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 their rates of decline flatten 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 has played a key role in supporting this category’s resilience.

Danny Brager, a SipSource analyst, 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 offers 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 increasing accuracy as more data becomes available. Short-term forecasts for Q1 2025 achieved over 90% accuracy 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 forward-looking indicator for the industry.

The forecasting tool provides quarterly projections for depletion growth rates not only at the category level but also with detailed breakdowns by class and price tier. The latest update also accounts for possible disruptions from changes in U.S. trade policy by adjusting some pessimistic growth scenarios to reflect anticipated market impacts.

As the U.S. spirits market continues to adapt to shifting consumer preferences and economic conditions, industry stakeholders are watching these forecasts closely to inform their decisions for the coming year. The stabilization of negative trends in major categories and ongoing strength in premium tequila suggest that while challenges remain, there may be opportunities ahead for those able to respond quickly to evolving market dynamics.