Cheaper tequila and canned cocktails are the top-selling alcoholic beverages in 2025

The US alcohol industry has another troubling year in 2025.

Spirits suppliers’ revenue fell 2.2% to $36.4 billion for the year, according to new data from industry trade group Distilled Spirits Council of the United States (DISCUS). This decline came in light of economic pressures and weak consumer confidence that affected discretionary spending.

“While total U.S. spirits sales will decline 2.2% in 2025, the spirits industry remains resilient,” Chris Swonger, CEO and president of DISCUS, said in a statement.

Overall volumes for the year rose 1.9% to 318.1 million 9-litre cases, indicating growing demand. But the decline in revenues suggests that while Americans are still drinking, they are also trading up on it — opting for lower-priced spirits and backing away from premium purchases.

Nearly every major spirits category reported a decline in revenue. Vodka sales fell 3% to $7 billion. Sales of tequila and mezcal — the fastest-growing segment of the industry in several years — fell 4.1% to $6.4 billion. US whiskey and juice revenues declined 0.9% and 3.2%, respectively.

The exception was comfort and value.

Sales of mixed cocktails, including spirits–The value of ready-to-drink beverages rose more than 16% compared to the previous year, to $3.8 billion. The category, known as RTD, has more than doubled its market share since 2021 as consumers gravitate toward a lower price point.

In the tequila segment, there has also been a shift towards more affordable bottles, as overall headwinds make consumers rethink splurging on premium brands. Volume at the lowest price point for tequila/mezcal tracked by the trade group grew 6.5% in 2025, along with a 2.8% rise at the next level up. Whisky, vodka, rum and gin have declined in volume at these price points.

As consumers move towards more affordable spirits, Companies like Diageo and Brown-Forman They may be better off, as they are more exposed to lower-priced tequilas and the fast-growing RTD category. Diageo owns the Casamigos tequila business and has built a large portfolio of spirits-based RTDs, while Brown-Forman controls key mixed-priced tequila brands such as El Jimador.

On the other hand, players who drink beer a lot like… AB InBev and Molson Coors They have minimal exposure to tequila, although they have expanded their RTD portfolios. Owner of Modelo and Corona Constellation brands In a unique location with both beer and tequila exposure, but with a smaller RTD footprint.

Overall, the alcohol market has declined after years of pandemic-fueled growth, and new data from DISCUS reinforces that normalization is now turning into contraction.

“Companies that have started reporting their numbers are reporting weak numbers but not worse than expected,” said Trevor Stirling, European and US beverages analyst at Bernstein. “The rate of decline is not getting worse, perhaps it is slowing down and one can dream of a return to volume growth.”

Distillers were also navigating headwinds overseas. U.S. spirits exports fell 9% year-over-year in the second quarter of 2025, amid continuing trade tensions and the removal of U.S. products from many Canadian retail shelves after President Donald Trump raised tariffs on the U.S. neighbor last year.

Industry leaders say uncertainty over tariffs makes long-term planning difficult.

“The unpredictability of global trade issues continues to weigh on the U.S. spirits sector,” Swunger said. “Reimposing tariffs on distilled spirits should be a priority to put America’s distilleries back on a path to growth and prosperity.”

Despite the revenue decline, spirits actually maintained their market share of the total alcoholic beverage market at 42.4%, compared to beer and wine at 41.8% and 15.7%, respectively.

However, the message from 2025 is clear: consumers are drinking less, but those who still drink are becoming more selective. And in a tougher economic environment, cheap canned tequila and cocktails are outperforming fancy bottles behind the bar.