U.S. wine and spirits sales stayed weak in the first quarter

The U.S. wine and spirits market remained under pressure in the first quarter of 2026, even as March brought a modest improvement in some channels and ready-to-drink cocktails continued to gain ground, according to new data released Thursday by Wine & Spirits Wholesalers of America.

WSWA said its SipSource data showed that core spirits ended the quarter down 4.4% in volume and 5.7% in revenue on a 12-month basis, while wine fell 8.3% in volume and 5.3% in revenue. The trade group said inflation, higher gas prices, tight inventories and consumers trading down to cheaper products continued to weigh on sales across the three-tier alcohol system.

The report pointed to a consumer shift toward lower-priced bottles and brands, a trend that has become more visible in both wine and spirits. In spirits, the gap between volume and revenue was the widest ever recorded in SipSource data, suggesting that shoppers are buying less expensive products. The $50 to $99.99 price tier fell 8.8%, while the $100-and-up tier declined 9.3%.

Tequila, one of the strongest categories in recent years, also softened. WSWA said tequila and agave spirits declined 3% in volume and 6.6% in revenue in the quarter. Luxury tequila revenue had been growing 4.2% a year earlier.

Wine showed a similar pattern. Revenue improved slightly from the end of 2025, but volume remained weak. The sub-$5 tier, which accounts for 22.2% of all wine volume, dropped 19.1%. WSWA said higher-end wine tiers were performing better than lower-priced ones, but still were not growing, and discounting remained common at the top end of the market.

March offered some signs of stabilization, especially for wine revenue and on-premise sales, though WSWA said calendar timing and one extra shipping day compared with the first quarter of 2025 likely helped those results. On-premise combined wine and spirits volume fell 3%, while off-premise volume dropped 7.4%.

Points of distribution also continued to decline, though less sharply than before. WSWA said distribution was down 3.2% in the latest period, compared with a peak decline of 5% in 2025. Total accounts were down 0.5%.

The clearest growth area remained spirits-based ready-to-drink cocktails, or RTDs. WSWA said that segment rose 30% in dollars and now makes up 28% of total spirits volume in off-premise retail channels. Wine-based RTDs rose nearly 14%. Malt-based RTDs, still the largest segment by dollar sales, continued to decline.

The growth has drawn more competition into the category. WSWA said there are now more than 750 spirits-based prepared cocktail brands on the market, making it harder for suppliers to stand out as they compete on flavor, convenience and occasion-based drinking habits.

Danny Brager, a SipSource analyst, said the market is being shaped by tighter portfolio management, SKU rationalization and more value-focused consumer behavior. Eric Schmidt, WSWA’s director of SipSource, said the data offers a clear view of where pressure remains persistent and where pockets of growth are emerging across categories, channels and price tiers.

For wholesalers and suppliers, the numbers point to a market still adjusting to slower demand, changing consumer budgets and a mix shift away from premium products toward lower-priced options and RTDs.