As costs soar, Americans are spending less on liquor

woman choosing liquor — RTD segment remains a bright spot for the industry. (Source: Unsplash)

By Kaycee Enerva May 25, 2026

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Rising living costs are reshaping how Americans buy alcohol, with consumers increasingly trading down to lower-priced products and cutting back on discretionary purchases.

First-quarter data from Wine & Spirits Wholesalers of America showed continued declines across the US spirits and wine market, as inflation, higher gas prices, and cautious spending weighed on demand.

According to SipSource data released by the industry group, total spirits sales fell 5.1 per cent by volume and 5.9 per cent by revenue during the quarter. Core spirits alone declined 4.4 per cent in volume and 5.7 per cent in revenue on a rolling 12-month basis, while wine dropped 8.3 per cent in volume and 5.3 per cent in revenue.

“The current environment reflects tighter portfolio management, SKU rationalization, and value-oriented consumer behavior,” said SipSource analyst Danny Brager.

The data pointed to growing pressure on premium categories, particularly as consumers shifted toward cheaper alternatives.

Higher-priced spirits segments recorded some of the steepest declines, with the $50 to $99.99 price tier down 8.8 per cent and the $100-plus segment falling 9.3 per cent.

Tequila and agave spirits, which had been one of the strongest growth drivers in recent years, also lost momentum. The category declined 3 per cent in volume and 6.6 per cent in revenue during the quarter. A year earlier, luxury tequila revenue had still been growing.

Wine sales also remained under pressure, especially at the lower end of the market. The sub-$5 wine tier, which accounts for more than one-fifth of total wine volume, declined 19.1 per cent.

Despite the slowdown across traditional alcohol categories, ready-to-drink cocktails continued to outperform the wider market, growing 30 per cent by value and now account for 28 per cent of total spirits volume.

Brager said the RTD segment remains a bright spot for the industry, although competition is intensifying as more brands enter the category.

“Spirits-based ready-to-drink cocktails remain a bright spot – but in an increasingly crowded segment where innovation, positioning, and disciplined execution matter more than ever,” he said.

SipSource compiles market insights using aggregated distributor depletion data covering more than 70 per cent of US wholesale wine and spirits volume across all 50 states.