2026 Analysis of the US spirits market: Trends and Downtrading

Jefferies provides a fresh look at the US spirits market for the four weeks ending March 21, revealing a significant correction in the industry. While most sectors face a slowdown, Ready-to-Drink (RTD) products remain a clear bright spot. These convenience-focused beverages increased their market share by 380 basis points compared to last year. Jefferies identifies ABI’s Cutwater as the primary engine behind this growth, even as the category weighs on the broader price-and-mix balance of the industry.

Navigating Headwinds in the US spirits market

In a comprehensive assessment, Jefferies identifies twenty-seven distinct headwinds currently pressuring the US spirits market. Macroeconomic factors, such as “wallet squeeze” on discretionary spending, lead these concerns. Additionally, the report notes that health and moderation trends have intensified, while competition from marijuana and the rise of GLP-1 medications create further uncertainty for traditional brands. Jefferies also questions whether current marketing and innovation strategies can effectively navigate a downturn, given the industry’s limited recent experience with such cycles.

Category Performance Within the US spirits market

The data from Jefferies illustrates the “de-premiumisation” occurring across the US spirits market. Consumers are not necessarily switching to “economy” brands, but they are certainly moving from prestige bottles (priced over $180) to more affordable premium options (priced under $140).

• Tequila: The category declined by 4.4% in March. While Casamigos and Altos saw significant value drops, affordable premium brands like Lalo and Lunazul bucked the downward trend.
• American Whiskey: This sector remains an outlier where premiumisation still thrives. High-end brands like Buffalo Trace and Blanton’s continue to grow, even as mainstream staples like Jack Daniel’s and Jim Beam soften.
• Scotch and Irish Whiskey: Volumes remained soft in March. Jefferies reports that Jameson saw a value decrease of 7.3%, while Scotch price-and-mix growth slowed significantly.

Future Outlook for the US spirits market

Looking ahead, the industry awaits a definitive positive turn. According to Jefferies, price-and-mix for distilled spirits dropped by approximately 1.6% in March, a sharper decline than the relatively flat performance seen in January and February. Companies with high exposure to these trends—including Diageo, Remy Cointreau, and Pernod Ricard—continue to monitor these shifts closely as RTDs and “affordable premium” brands redefine the competitive landscape.