For years, premiumization was the driving force behind the spirits industry’s success. Consumers eagerly traded up for high-end whiskey, craft tequila, and small-batch gin, drawn to the prestige and craftsmanship these products represented. But the tides are turning. The latest data from the Wine & Spirits Wholesalers of America (WSWA) tells a different story—one where consumers aren’t just shifting their spending habits but stepping away from alcohol entirely.
The numbers highlight this shift. In 2024, spirits depletions fell by 3.7%, with revenue down 4.3%. Wine took an even bigger hit, dropping 7.2% in volume and 6.3% in value. The once-reliable premiumization trend is now "all but dead," according to WSWA, and the reasons are clear. Younger consumers—the very group that once fueled the craft boom—are drinking less. Wellness trends, moderation movements, and a growing culture of abstinence are reshaping consumption patterns. And it’s not just about drinking less; it’s about seeking something different altogether.
Instead of reaching for ultra-premium spirits, consumers are gravitating toward alternative beverages. Energy drinks, botanical-infused seltzers, and hemp-derived products are cutting into occasions that once belonged to traditional alcohol. Meanwhile, ready-to-drink (RTD) spirits-based cocktails are defying the overall downturn. In 2024, they grew by 3.4% in volume and 3.5% in revenue, now accounting for 14.2% of the total U.S. spirits market—a staggering jump from just 3.2% five years ago. The appeal is clear: convenience, flavor variety, and an easy drinking experience.
The RTD boom has done more than shift consumer interest—it’s upended the supply chain. Many producers are bypassing traditional wine and spirits wholesalers, opting instead to distribute RTDs through beer networks, signaling a fundamental shift in how spirits are sold. Convenience stores have become the fastest-growing retail channel for RTDs, with volume sales jumping 14.1% and revenue rising 12.4%. In states where laws now allow spirits-based RTDs to be sold alongside beer and wine, the category has seen even greater acceleration.
While retail is evolving, on-premise drinking is proving surprisingly resilient. Bars and restaurants saw a 7.5% increase in accounts selling wine and spirits, signaling that while consumers may be drinking less at home, social drinking occasions still hold value. The number of retail accounts selling alcohol also grew by 0.7% in 2024, driven largely by RTDs. This shift underscores a crucial reality—consumers are prioritizing convenience and social experiences over traditional, high-end spirit purchases.
Looking ahead, 2025 is expected to bring some stabilization, with minimal fluctuations across major categories if trade policies remain unchanged. But the long-term outlook is uncertain. The assumption that consumers will always trade up is no longer valid. The question now is whether premiumization can evolve or if the industry must redefine what “premium” means in an era where accessibility, convenience, and alternative beverages are reshaping consumer expectations.
The spirits industry is at a turning point. Brands that built their identity on luxury and exclusivity will need to rethink their strategies or risk losing relevance. The decline of premiumization doesn’t necessarily mean the end of high-end spirits, but it does mean that relying on old models of aspiration and status won’t be enough. Consumers are rewriting the rules, and the brands that pay attention—and adapt—will be the ones that thrive.
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