A vendor holds up a bottle of Casamigos, tequila from Diageo, the world’s main spirits maker, as U.S. President-elect Donald Trump plans to impose tariffs on Mexico that might have an effect on as much as $1.6 billion in tequila gross sales, at a liquor retailer in Monterrey, Mexico, December 10, 2024.
Daniel Becerril | Reuters
The U.S. spirits trade maintained its market share management over beer and wine for a 3rd straight yr in 2024, at the same time as revenues slid, based on new information launched Tuesday.
Spirits provider gross sales in america fell 1.1% final yr to a complete of $37.2 billion, whereas volumes rose 1.1%, based on the annual U.S. financial report from the Distilled Spirits Council, a number one commerce group.
That is the primary time income for the spirits class has fallen in over 20 years. Regardless of a return to extra typical shopping for patterns after a pandemic growth, spirits revenues have grown a median of 5.1% yearly since 2019. From 2003 to 2019, the typical annual progress charge was 4.4%.
“Whereas the spirits trade has confirmed to be resilient throughout robust occasions, it’s definitely not proof against disruptive financial forces and market challenges, and that was undoubtedly the case in 2024,” stated DISCUS President and CEO Chris Swonger.
Tequila and mezcal remained a vibrant spot for the yr as the one spirits class displaying gross sales progress, as income climbed 2.9% to $6.7 billion.
Prime 5 spirits classes by income 2024:
- Vodka: $7.2 billion (flat from prior yr)
- Tequila/mezcal: $6.7 billion (up 2.9%)
- American whiskey: $5.2 billion (down 1.8%)
- Cordials: $2.8 billion (down 3.6%)
- Premixed cocktails together with spirits RTDs: $3.3 billion (up 16.5%)
Premixed ready-to-drink cocktails grew double digits as effectively, however the class consists of varied forms of blended spirits together with vodka, rum, whiskey and cordials.
The Mexico tariff risk
Mexican spirits and beer have grown extra fashionable with shoppers for over 20 years, and tequila and mezcal gross sales outpaced American whiskey for the primary time in 2023.
The street forward for the Mexico-based merchandise stays unsure. The Trump administration earlier this month delayed imposing tariffs on imports from Mexico — which would come with distinctive merchandise like mezcal and tequila — by one month whereas tariff negotiations proceed.
“These tariffs have wreaked havoc on our craft distilling group,” stated Sonat Birnecker Hart, president and founding father of KOVAL Distillery in Chicago. “Many craft distillers have expended nice time, effort and sources to increase into worldwide markets solely to see their desires shattered by tariffs which have completely nothing to do with our trade.”
Swonger additionally famous that tariffs could be a “catastrophic blow” to distillers and solely add to the stress larger rates of interest have placed on the trade’s provide chain, as wholesalers and retailers proceed to deplete stock buildups and cautiously restock merchandise.
“Shoppers have been contending with among the highest costs and rates of interest in many years, which put a pressure on their wallets and compelled many to cut back spending on little luxuries like distilled spirits,” stated Swonger.
“Our gross sales dipped barely however shoppers continued to decide on spirits and revel in a cocktail with household and associates,” he stated.