The numbers are in, and they are not kind to the liquor industry.
U.S. spirits sales fell 4.7 percent in the four weeks ending February 21st, excluding prepared cocktails, according to Nielsen data compiled by Bank of America Global Research. Volume dropped 4.3 percent.
Every major category declined, Bank of America found. American whiskey fell 6 percent. Vodka dropped 4 percent. Scotch was down 7 percent. Cognac slid 9 percent. Brandy fell nearly 10 percent. Even tequila, the category that powered much of the industry’s post-pandemic growth, declined 2 percent.
The February reading erased hopes that a modest January improvement signaled a genuine recovery. Bank of America analysts concluded the rebound was almost certainly weather-driven.
There is a certain irony in that. January is the month of “Dry January,” the increasingly popular post-holiday abstinence trend. And yet it was the one month that showed an improvement in alcohol sales. The cold weather, it appears, drove more people to the liquor store than the calendar drove them away from it. In the final two weeks of February, as temperatures normalized, the value decline accelerated to around 5.5 percent, according to Bank of America.
Beer Also Declining
Beer fared only slightly better, according to a separate Bank of America analysis of Nielsen data. Industry volume declined 3.6 percent over the same period, with price increases of 1.6 percent limiting the value decline to 2 percent. Every major brewer except Constellation Brands posted losses.
AB InBev, the world’s largest brewer, saw overall volume fall 3.8 percent. The company’s flagship brands are struggling badly. Bud Light, still the single largest brand in AB InBev’s U.S. portfolio at roughly 22 percent of sales, dropped another 9.5 percent. Budweiser fell 6.8 percent.
The bright spots within AB InBev are telling. Michelob Ultra, now the company’s largest brand at 28 percent of U.S. sales, grew 3.5 percent. Busch Light rose 2.9 percent. Both are positioned as lighter, more health-conscious options.
Heineken USA was the worst performer among major brewers in the Bank of America data, with volume down 8.4 percent. The flagship Heineken Original brand fell 13 percent. Dos Equis dropped 3 percent and Tecate 6 percent. Molson Coors declined 6.3 percent, with Coors Light off 5.6 percent, Miller Lite down 4.4 percent, and Blue Moon tumbling nearly 10 percent.
Constellation Brands, whose portfolio is anchored by Modelo Especial and Corona, was the lone major gainer, posting volume growth of 0.5 percent and picking up 74 basis points of market share, Bank of America said.
Americans Turning Away from the Hard Stuff
The major spirits companies are in broad retreat, the Bank of America data shows. Diageo, the world’s largest spirits company, saw U.S. sales fall 6.9 percent. Crown Royal, which accounts for roughly a quarter of Diageo’s U.S. Nielsen sales, dropped 8 percent. Smirnoff fell 8 percent. Casamigos, the celebrity tequila brand Diageo acquired for up to $1 billion in 2017, tumbled 15 percent. Don Julio was down 2 percent. Not one of Diageo’s larger brands is currently growing in U.S. retail channels, according to Bank of America.
Pernod Ricard, maker of Jameson and Absolut, declined 7.3 percent. Jameson, which accounts for nearly a third of Pernod’s U.S. Nielsen sales, fell 4 percent. Absolut dropped 7 percent. Malibu and Kahlua, which together represent another fifth of U.S. sales, also declined.
Brown-Forman posted a 3.3 percent decline. Jack Daniel’s, which accounts for roughly two-thirds of the company’s U.S. retail sales, fell 4 percent. Old Forester dropped 13 percent. Woodford Reserve was off 5 percent. The introduction of Jack Daniel’s Blackberry provided some relief, contributing 2.7 percentage points to Brown-Forman’s total growth figure — meaning the underlying business performed even worse than the headline number suggests, Bank of America noted.
1934- William Powell as Nick and Maureen O’Sullivan as Dorothy in a scene from “The Thin Man”.
Rémy Cointreau fell 3.6 percent, with its flagship Rémy Martin cognac down 6 percent, outpacing even the broader cognac category’s steep decline.
Campari was nearly flat at negative 0.1 percent, making it the relative standout among major spirits companies in the Bank of America analysis. Espolon tequila surged 18 percent and Aperol grew 11 percent. But most of the rest of Campari’s portfolio declined, limiting the overall picture.
There is one conspicuous exception to the carnage across both beer and spirits: canned, ready-to-drink prepared cocktails.
The category surged 30 percent in the latest period, Bank of America found, and now accounts for 17 percent of the total spirits market. The fastest-growing brands by incremental sales — Cutwater, Surfside, Sun Cruiser, Carbliss, and NUTRL — are all prepared cocktails. AB InBev’s Cutwater brand rocketed 113 percent. NUTRL rose 24 percent.
Among traditional bottle spirits, a handful of brands managed growth. Svedka, Colonel E.H. Taylor, Tito’s, Lalo tequila, Chum Churum, and Espolon all posted gains. But they are outliers in a market defined by decline.
Prepared cocktails are gaining share within a shrinking pie, not expanding it. Strip them out and the overall spirits market looks considerably worse, according to Bank of America.
Health Concerns Driving Americans Dry
The retail data reflects something deeper than a rough quarter or a difficult comparison period.
Gallup’s annual consumption survey, conducted last July, found that just 54 percent of American adults now say they drink alcohol — the lowest figure in the polling organization’s nearly 90-year trend on the question, and down from 62 percent just two years earlier. The consecutive annual declines are, in Gallup’s telling, unmatched in their recorded history.
Those who still drink are drinking less. The average number of drinks consumed per week among drinkers fell to 2.8 — the lowest since 1996, and down sharply from 3.8 the prior year. A record-low 24 percent of drinkers reported having had a drink in the previous 24 hours.
The decline is broad-based but uneven. Women have pulled back more sharply than men, with reported drinking among women falling 11 percentage points since 2023 to 51 percent. Young adults, who had already been trending away from alcohol for a decade, now report drinking at a rate below 50 percent — lower than any other age group.
The driving force appears to be a fundamental shift in how Americans think about alcohol and health.
For most of the past two decades, the conventional wisdom held that moderate drinking carried modest cardiovascular benefits. That consensus has collapsed. A majority of Americans — 53 percent — now believe that even moderate alcohol consumption is bad for their health, up from just 28 percent in 2018.
The shift has been sharpest among young adults, nearly two-thirds of whom now hold that view. But it is spreading rapidly to older age groups as well.
Gallup notes the parallel to tobacco. The surgeon general’s warnings of the 1960s did not produce an overnight collapse in smoking rates, but they marked the beginning of a decades-long structural decline. Whether the medical establishment’s current posture on alcohol — increasingly summarized as “no amount is safe” — represents a similar inflection point is the question now hanging over an industry that spent decades benefiting from the opposite message.
The one thing the data rules out is a simple substitution story. Marijuana use, now legal in roughly half of U.S. states, has been essentially flat for four years. Americans are not trading bourbon for cannabis.
They appear to be trading it for nothing — or for a canned cocktail with a lower alcohol content than the drink it replaced.
The distance traveled may be best measured against where America started. During oral arguments before the Supreme Court this week in a case involving gun rights and drug use, Justice Neil Gorsuch offered a reminder of the nation’s original relationship with alcohol. John Adams, he noted, took a tankard of hard cider with his breakfast every day. James Madison reportedly drank a pint of whiskey daily. Thomas Jefferson, Gorsuch quipped, was not much of a drinker — he only had three or four glasses of wine a night.
For the liquor cabinet stocked with half-empty bottles of single malt and rye, the founders would not recognize the country they built.
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