Distilleries NAICS 312140

Feb 28, 2026 - A Mixed 2025

• The Distilled Spirits Council reports that US distilleries navigated a mixed environment in 2025 marked by strong consumer demand for spirits‑based ready‑to‑drink (RTD) cocktails but also mounting pressure from global trade tensions. DISCUS reports that spirits maintained a 42.4% market‑share lead despite a 2.2% decline in total supplier revenue, with RTDs standing out as the fastest‑growing category, up 16.4% to $3.8 billion. This surge benefits distilleries that produce or supply spirits for RTDs, offering a key growth channel as traditional categories soften. However, unresolved international trade disputes continue to hinder export growth. Retaliatory tariff threats, Canada’s removal of many American spirits from retail shelves, and regulatory uncertainty are limiting market access and discouraging investment, especially for small and mid‑sized craft distilleries. US spirits exports fell 9% year‑over‑year in Q2 2025, underscoring the strain. Tariff resolution is critical for long‑term industry expansion, per DISCUS.
• New data from drinks data provider IWSR show that while Americans say they are drinking less, actual consumption has only slightly declined, with weekly averages hovering around 10 to 12 drinks per adult since the 1970s. For distilleries, this challenges the narrative of a dramatic long‑term decline in drinking and suggests that recent volume softness may be driven more by economic pressures than a structural shift away from spirits. That distinction matters: cyclical downturns typically require pricing, packaging, and promotional adjustments, while structural declines would demand deeper portfolio or strategy changes. However, the modest drop in consumption, combined with younger consumers’ lower drinking rates and growing health‑conscious behavior, still signals emerging headwinds for future demand growth. Distilleries may face slower volume expansion, greater competition for share, and the need to invest more in premiumization, low‑ABV offerings, and brand differentiation.

• Recent depletion trend data for wine and spirits signals a bottoming out of downward trends in key categories, according to the latest SipSource quarterly forecast. The 2025 outlook is for negative growth rates to stabilize by yearend, signaling a shift away from the steep and growing decline levels seen between 2022 and 2024. In total, SipSource projects core spirits (including vodka, whiskey, rum, and gin) to bottom out at a negative 4.56% growth rate by the end of 2025 before rebounding slightly to decline at a negative rate of about 4.1% by Q2 2026. The steep downward trend and negative growth rates seen for rum, US whiskey, vodka, and brandy/cognac are expected to largely flatten by the first half of 2026, albeit in negative territory, per the SipSource report.
• Producer prices for distilleries stayed flat in November compared to a year ago, after dipping 0.8% in the previous November-versus-November annual comparison, according to the latest US Bureau of Labor Statistics data. Generally, prices for distillers have been flat or trended downward since mid-2023 as sales and demand softened following a steep run up in the aftermath of the pandemic fueled by the reopening of bars and restaurants. Employment by breweries, wineries, and distilleries grew 4.8% year over year in November to near record high levels, per the BLS.