Spirits Sales Fall as Drinkers Trade Down

By mid-2026, the trade-down trend in spirits had become a measurable shift across several major markets, with consumers buying less often, narrowing the range of categories they drink and moving from high-end bottles to lower-priced premium labels, mainstream spirits, ready-to-drink products and, in some cases, beer.

The clearest evidence came from the United States. WSWA SipSource reported that in the first quarter of 2026 total spirits sales fell 5.1% in volume and 5.9% in revenue. The $50 to $99.99 tier fell 8.8%, while bottles priced at $100 and above fell 9.3%. Tequila and agave spirits were down 3.0% in volume and 6.6% in revenue. That marked a sharp reversal from the previous year, when luxury tequila revenue was still growing 4.2%.

The pattern was not limited to the United States. IWSR’s preliminary 2025 data showed total beverage alcohol volumes down 2% across 22 major markets, with spirits performing worse than other large categories. When national spirits such as baijiu were excluded, spirits still fell 1% in both volume and value. The company’s public releases point to a market that is no longer simply rewarding premium brands for being premium. Instead, consumers are asking more often whether a higher price is justified.

That shift has been building for several years. IWSR’s consumer research from 2024 through 2026 found moderation and downtrading becoming embedded in mature markets. Among consumers who said they were moderating their drinking, 50% cited wellbeing or changes in social habits, 30% pointed to economic pressure and 20% cited health concerns. Younger legal-drinking-age drinkers have also been carrying fewer categories in their repertoires, which means they are less likely to buy across multiple spirit segments the way older consumers once did.

The result is not a rejection of premium spirits so much as a lower ceiling on what people are willing to pay for them. In the United States, IWSR said all income groups were already pulling back from super-premium-plus tequila by the second half of 2024. That matters because tequila had been one of the strongest growth engines in spirits for years.

The pressure is strongest in mature markets where inflation has remained sticky and household budgets have not fully recovered. In Britain, IWSR recorded spirits volume down 5% in 2023 and forecast a further annual decline of about 1% through 2028. HM Revenue & Customs said spirits duty receipts for April 2025 through January 2026 were down 4% from a year earlier. In the euro area, household real income per person rose only 0.1% in the final quarter of 2025, while the saving rate fell, leaving little room for broad-based trading up.

In the United States, inflation remained a drag as well. Consumer prices rose 3.8% in April 2026, while real average hourly earnings were down 0.3% from a year earlier, according to federal data. That combination has made shoppers more sensitive to shelf prices and more willing to switch brands or formats.

Still, the picture is not uniformly negative for spirits makers. Growth is shifting rather than disappearing. IWSR expects developing markets, lower price points and ready-to-drink products to absorb some of the demand that once flowed into expensive bottles. Mexico remains one of its projected future volume-growth markets. In China, imported spirits volumes were stable in 2025 even as values fell because consumers traded down on price. Travel retail is also recovering as an experience-driven channel for higher-ticket purchases, even though volumes remain below pre-pandemic levels.

For producers and distributors, the message is that old pricing ladders may no longer hold on their own. Brands are under pressure to rebuild those ladders with smaller pack sizes, sharper promotions and clearer reasons for consumers to pay more on specific occasions rather than simply raising prices and expecting loyalty to follow.

The public data behind this trend are uneven because much of the industry’s detailed pricing and channel information sits behind paid databases from firms like IWSR, NielsenIQ and Euromonitor. But the available figures point in the same direction: trade-down is no longer a temporary response to inflation alone; it has become part of how many consumers are choosing spirits in mid-2026.