On June 9, 2025, SipSource released its latest quarterly forecast update for the U.S. spirits market, offering a cautiously optimistic outlook for producers and retailers.
Using advanced artificial intelligence and machine learning models, the forecast—developed in partnership with consulting firm Kearney—analyzes consumption trends and predicts annualized volume growth rates for the period extending through the second quarter of 2026.
A Market Seeking Balance After Years of Decline
After facing significant headwinds between 2022 and 2024, the U.S. spirits market appears to be entering a phase of stabilization. According to the forecast, total spirits consumption is expected to bottom out at a -4.56% annual growth rate by the end of 2025, before improving slightly to -4.09% by Q2 2026. While still in negative territory, this modest recovery marks a shift from the steeper declines of recent years.
Major categories such as vodka, rum, American whiskey, and brandy/cognac continue to struggle, yet their rates of decline are projected to moderate in the first half of 2026. Analysts interpret this plateauing as a positive signal for the industry—particularly for strategic planning by suppliers, distributors, and retailers.
Tequila and Agave Spirits Show Resilience
One notable exception to the downward trend is the tequila/agave segment. Long known for its volatility, the category is now demonstrating year-over-year growth approaching 1% by mid-2026. This stabilization is largely fueled by sustained consumer interest in premium offerings, especially those priced between USD 20 and USD 100.
As Danny Brager, SipSource analyst, explained, “We’re starting to see a flattening of negative curves. While that doesn’t erase the challenges of recent years, it does suggest a turning point for producers who have been waiting for a more predictable market landscape.”
Technology-Driven Forecasting with Proven Accuracy
The SipSource predictive model is built on one of the industry’s most comprehensive databases, with its algorithms refined by ongoing data inputs. Notably, forecasts for Q1 2025 exceeded 90% accuracy, while one-year projections from January 2024 onward held at 80% accuracy. This level of precision has made the report a reference point for market intelligence in the beverage alcohol sector.
The forecast breaks down consumption trends across seven major spirits categories, analyzing growth by class and price range, while also incorporating potential effects from regulatory or trade disruptions. Some downside scenarios were adjusted to reflect concerns over potential tariff changes or new compliance requirements.
Planning Ahead Amid Market Complexity
While challenges remain, particularly in mainstream spirit categories, the slowing of contraction rates and the performance of niche segments like tequila present planning opportunities for market stakeholders. As pricing dynamics, consumer preferences, and policy risks continue to evolve, SipSource's data-backed insights provide a critical tool for navigating the path forward.
For an industry long marked by volatility, the 2025 forecast update offers something rare: measured optimism.
Source: Vinetur