The distilled spirits industry continued to evolve in 2024, showing resilience despite economic challenges. The Distilled Spirits Council of the United States (DISCUS) 2025 Economic Briefing highlights key trends that spirits professionals should know. Here’s a breakdown of the most important insights and what they mean for brands.
The Current State of the U.S. Spirits Industry
Spirits remain the top category in the Total Beverage Alcohol Market, holding 42.2% of revenue share. This is a 13-point increase since 2000, with each point worth about $880 million in supplier revenue. However, 2024 showed mixed results:
- Volume increased by 1.1% (3.4 million 9-liter cases added).
- Supplier revenue declined by 1.1% ($424 million decrease).
- The industry is adjusting post-COVID, as consumers spend cautiously.
Why the mixed results? As Christine LoCascio, the Chief of Policy, Strategy and Membership at DISCUS explained, consumers are spending more on essentials like housing and healthcare, leaving less for luxuries like premium spirits. Despite this temporary slowdown, the long-term outlook remains positive, with spirits revenue growing at a healthy 5.1% average since 2020.
The Spirit Industry's Economic Impact
Spirits continue to drive the U.S. economy, contributing $250 billion annually and supporting 1.7 million jobs across production, distribution, and sales. Other key facts:
- 2.8 billion pounds of grain were used in spirits production in 2023, up 121% in the last decade.
- The U.S. now has over 3,100 distilleries, up from just 60 two decades ago.
This growth has created jobs and opportunities across the country, from grain farmers to packaging suppliers to hospitality workers.
Spirits Category Performance: RTDs Surge
While some traditional spirits categories showed slowdowns, ready-to-drink (RTD) cocktails are booming.
Top Spirits Categories by Revenue
- Vodka – $7.2B (0.0%)
- Tequila/Mezcal – $6.7B (2.9% growth)
- American Whiskey – $5.2B (-1.8% decline)
- Cocktails/RTDs – $3.3B (16.5% growth)
- Cordials – $2.8B (-3.6% decline)
Top Spirits Categories by Volume
- Vodka – 74.1M 9L cases (-1.1% decline)
- Cocktails/RTDs – 73.1M 9L cases (17.0% growth)
- Tequila/Mezcal – 32.2M 9L cases (2.0% growth)
- American Whiskey – 30.3M 9L cases (-2.7% decline)
- Rum – 20.7M 9L cases (-8.9% decline)
Fastest-Growing Categories by Revenue
- Cocktails/RTDs: +$468M (16.5% growth)
- Tequila/Mezcal: +$192M (2.9% growth)
- Canadian Whisky: +$45M (2.0% growth)
- Irish Whiskey: +$21M (1.8% growth)
The rise of spirits-based RTDs is particularly noteworthy—they now make up 18% of the total RTD market, up from just 8% in 2021, showing that consumers increasingly prefer spirit-based options over malt-based alternatives.
Premium Products: Temporary Pause or Shifting Trends?
The industry's long-running "premiumization" trend (consumers trading up to more expensive products) appears to be on pause.
- Super-premium spirits fell by 5.6% in revenue and 4.8% in volume.
- Value spirits grew by 3.5% in revenue and 4.6% in volume.
However, high-end and super-premium products still account for 59% of total spirits revenue, suggesting consumers aren't abandoning premium spirits entirely—they're just being more selective about their splurges.
Export Markets: Spirits Industry Under Threat
The U.S. spirits industry exported $2.2 billion in spirits from 45 states in 2023, with American whiskey making up 63% of total exports. The European Union is our largest export market, particularly for American whiskey.
But this success faces a serious threat: a looming 50% EU tariff on American whiskey starting April 1, 2025 could disrupt growth. Previous 25% tariffs (2018-2021) caused American whiskey exports to the EU to drop by 20%. When those tariffs were lifted, exports bounced back by 60%.
Sonat Birnecker Hart, who runs Koval Distillery in Chicago, explained why this matters especially for smaller producers: "Export is a way to grow, continue to hire more people, continue to buy more grain... But when tariffs are looming at 50%, that is going to be an amazing blow for craft distilleries who are seeing export as a way to grow."
What This Means for Your Brand
Based on these trends, here are five key takeaways for spirits brands:
- Consider the RTD opportunity: The explosive growth in spirits-based RTDs offers a way to reach new consumers and diversify your portfolio.
- Watch the tariff situation: If you export (or plan to), keep a close eye on trade developments and consider contingency plans for markets that might be affected by tariffs.
- Adjust your value messaging: With consumers watching their spending, clearly communicate why your product is worth the price—whether it's quality, heritage, or a unique experience. Overproof's Tastings app can help you execute and measure in-store sampling programs that let consumers experience your product firsthand, capturing valuable feedback and conversion data to refine your messaging. Sign up for Tastings for free!
- Optimize your inventory: Work closely with distributors to ensure you're not overstocking the channel, as retail sales are outpacing shipments.
- Support on-premise recovery: The hospitality industry is still rebuilding, with employment just back to pre-pandemic levels. Overproof can help you identify high-potential on-premise accounts and track the effectiveness of your activation programs, ensuring your team focuses on venues where your brand has the best opportunity to grow as the channel recovers.
Looking Ahead: DISCUS Priorities for 2025
DISCUS is focusing on several key initiatives to safeguard the spirits industry this year, including:
- Working with the government to prevent new tariffs on spirits
- Fighting against potential tax increases at both federal and state levels
- Expanding market access for spirits-based RTDs
- Supporting modernization efforts like cocktails-to-go and direct-to-consumer shipping
- Promoting responsible consumption through various programs
State of the Spirits Industry Wrapped Up
Despite short-term challenges, the spirits industry continues to show remarkable strength and adaptability. By understanding these trends and adjusting your strategy accordingly, your brand can position itself for success in 2025 and beyond.
As DISCUS President Chris Swonger put it, the US spirits sector has "maintained our market share lead in the Total Beverage Alcohol Market by Revenue," highlighting the industry's continued strength even in challenging times.
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FAQs About the Spirits Industry in 2025
What types of spirits are selling best right now?
Vodka remains the revenue leader, but ready-to-drink cocktails and tequila are showing the strongest growth. RTDs grew 17% in volume last year, while tequila and mezcal revenue increased by 2.9%.
Are consumers still buying premium spirits?
Yes, though the trend has slowed. High-end and super-premium products still account for 59% of total spirits revenue, but value products are growing faster right now as consumers watch their spending.
How important are exports for American spirits?
Very important! The US exported $2.2 billion in spirits in 2023, with American whiskeys making up 63% of that total. The EU is our largest export market, but potential tariffs could significantly impact this business.
What's driving the growth in spirits-based RTDs?
Consumers are increasingly choosing spirits-based RTDs over malt-based alternatives, likely due to flavor preferences and perceived quality. Spirits-based RTDs now make up 18% of the total RTD market, up from just 8% in 2021.
How many distilleries are there in the United States now?
There are over 3,100 distilleries across the United States today, compared to just about 60 two decades ago—a remarkable American success story.
