The country’s 17 control states experienced mixed beverage sales results amid last year’s slow economic growth, with sales holding relatively level. Strong sales of RTDs, Tequila, and Bourbon, as well as the growing popularity of small package sizes, contributed to positive trends. “We still have a positive price mix,” says David Jackson, COO of trade relations with the National Alcohol Beverage Control Association (NABCA).
The beverage alcohol industry continues to face challenges this year from economic concerns regarding tariffs, negative health press, and a growing interest in adult non-alcoholic beverages. Spirits’ producers will be keeping an eye on pricing and fighting to maintain market share. “The decrease in 9-liter cases is greater than the decrease in dollars,” Jackson says. “Things are still premium even if it’s going backward.”
Total spirits dollar sales decreased 0.3% to $13.6 billion on a 0.9% volume decline to 61.28 million 9-liter cases in control states, according to NABCA and Impact Databank. The control states on-trade for spirits declined 2% in both volume and dollars. Growth trends were led by RTDs and Tequila, as both categories were up in volume and dollar sales. RTD sales increased 19.3% to $354 million on a 22.1% volume gain to 4.2 million cases in control states. Spirit of Gallo’s High Noon, the No. 4 spirits brand by volume, posted the highest volume rate among the top-ten spirits brands in control states with a 16.5% gain to 1.27 million cases. High Noon has focused on increasing its number of variety packs with the January introduction of its 700-ml. High Noon Big Can line up.
Jose Cuervo, the No. 1 Tequila in control states, decreased 1.7% to 981,000 cases. Tequila sales overall in control states climbed 7.4% to $2.5 billion on 6.2% volume increase to 6.9 million cases. While still producing strong results, Tequila’s growth has slowed as consumers trade down from higher-end to premium brands less than $35 a 750-ml. “Tequila costing more than $100 a bottle is still growing, but its 2% of the business. It’s up 2% in volume and 4% in dollars,” Jackson says. “Premium brands $20 to $35 a 750-ml. have a 47% share of the total Tequila category and are growing nicely.”
Among spirits categories in control states, vodka remained the largest in both dollar sales, at $2.87 billion, and volume, at 18.75 million cases, although each decreased 2.7%. No. 1 spirits brand Tito’s vodka bucked trends in control states with 0.4% growth to 3.39 million cases. Tito’s dominates with a 1.63 million case lead over No. 2 spirits brand Smirnoff, which was down 6.6% to 1.76 million cases in 2024. No. 3 Fireball dipped 4.1% in control states to 1.7 million cases. Among the top ten spirits brands in control states, High Noon and Tito’s were the only ones to grow.
Despite slight volume decreases, cordials, which were up 0.9% to $1 billion, and domestic whiskey, up 0.7% to $2.87 billion, experienced modest gains in dollar sales. Jack Daniel’s, the No. 9 spirits brand in control states, decreased 2.3% to 979 million cases. No. 10 Jim Beam slipped 0.8% to 888,000 cases. “Domestic whiskey growth is coming out of the ultra-premium, $40 and up,” Jackson says. “The category getting hurt is in the value-to-premium group, which comprises 40% of the category.”
Mixed Results
Spirits’ dollar sales increased in eight of the 17 control states, but volume was up in just four states. North Carolina, the No. 3 control state by spirits sales and volume, posted the highest growth rate at 1.9% to $1.866 billion on a 0.8% volume gain to 7.7 million cases. RTDs sales increased 20% and Tequila advanced 11%, while Bourbon was up 3%. The popularity of smaller bottle sizes, such as 50-ml.,100-ml., and 375-ml., are also driving spirits sales. The seven other control states experiencing an increase in spirits sales last year were Alabama (up 1.4%), Montana, Wyoming, Vermont (each up 1%), Maine (up 0.7%), West Virginia (up 0.4%), and (Iowa (up 0.1%).
The Tar Heel State continues bucking negative growth trends and got off to a strong start this year with spirits sales increasing 1.4% in January. “Based on feedback from local ABC Boards, increased cold box space is driving additional sales,” says Chairman Hank Bauer. “Boards are investing in more cold box space and legislation passed last year allows suppliers to provide coolers for their brands.”
New legislation introduced in North Carolina last year allows suppliers to offer more discounts and the state ABC also increased discount levels. North Carolina’s General Assembly is expected to discuss Sunday sales at ABC stores again, which could increase sales volume if passed.
Bauer is optimistic about the long-term spirits business in North Carolina with continued support from legislative efforts to modernize and innovate. Moreover, ABC boards are reinvesting in their operations and communities, as the state continues to experience strong population growth.
Dollar Sales Leader
Despite a 2% decrease in spirits volume to 8.86 million cases, spirits dollar sales in Michigan were down just 0.4% to $2.1 billion last year, ensuring the Wolverine State held on to its position as the leading control state by dollar sales. By volume, Michigan is No. 2 behind Pennsylvania, where volume increased 1% to 9.5 million cases. Spirits’ sales in Pennsylvania, however, fell 2% to $1.87 billion and the state is ranked No. 2. “Spirits sales in Michigan remain robust, and we look forward to an active spirits market again in 2025,” says Kristin Beltzer, chairperson of the Michigan Liquor Control Commission (MLCC).
The MLCC lists more than 14,000 spirits products vendors registered to sell in Michigan, providing a plethora of spirits options to consumers. “The MLCC welcomes any spirits vendor to sell its products to the MLCC for distribution to retailer licensees,” Beltzer says. “Since 2021, craft distillers in Michigan and out-of-state craft distillers meeting certain requirements have also been able to self-distribute their spirits in Michigan directly to retailers. This allows for spirits manufacturers of all sizes to compete in Michigan’s spirits market.”
Top Growth Brand
A key reason why Pennsylvania’s spirits volume increased last year was because Philadelphia-based Surfside RTD was ranked as the fastest growing premium spirit among the top 100 premium brands, worldwide, according to Impact Databank. Considering the brand’s volume was under 200,000 cases in 2022, this is amazing growth. Now available in all 50 states, Surfside grew 273.7% to 4.7 million cases in 2024 and ranked as the 32nd largest premium spirits brand worldwide.
Overall, RTDs grew 30.5%, or by $32.6 million in dollar sales, in 2024 to $139.5 million, according to the Pennsylvania Liquor Control Board (PLCB). A law change last summer made RTDs available at more than 1,000 private retailers across Pennsylvania beginning last fall.
“Consumers shifted to prepared cocktails, including RTDs, small format multi-packs, and ready-to-serve cocktails in larger formats,” says PLCB chairman Darrell Clarke. “We continue to expand our assortment to give customers new options.”
Tequila was also a bright spot for the PLCB’s Fine Wine & Good Spirits stores in 2024. Strong demand continues for American whiskey, especially Bourbon, both in national brands and rarer bottles available through the PLCB’s Limited-Release Lotteries. Bourbon dollar sales increased 5.2%, or by $10.2 million, to $206 million in Pennsylvania in 2024, and units increased 2.6%. So far this year, Bourbon units are up 0.8% and dollars are up 2.2%. In 2024, Tequila dollar sales increased 8.3% to $253.9 million, and units increased 9.24%. Tequila units are trending up this year at 13.4% and dollars sales are up 14%. “We’re expanding our product selection in growth categories such as Tequila and RTDs, while optimizing our assortment in value and mature categories,” Clarke says.
To promote sales of premium products, the PLCB began adding a wider selection of luxury items to its monthly sales promotions and in-store merchandising and education. “This enables us to encourage consumer trial, drive through luxury inventory, and inspire consumers to trade up,” Clarke says. “To further enhance the in-store experience for customers, our wine specialists align their free tastings with the promotions to give people an opportunity to taste what we’re promoting.”
In other action, sales of spirits in miniature bottles are trending strong in the Keystone State. “Growing our minis programs continues to be a focus,” Clarke says. “The success of our ‘Mini Bar’ mobile shelf units in driving sales has inspired us to expand the merchandising approach to all stores statewide.”
While spirits sales were down 0.4% in units, 0.6% in dollars, and 1.8% in terms of 9-liter cases in Pennsylvania during the first five-and-a-half weeks of 2025, Clarke is optimistic about the industry’s future. “The enjoyment of wines and spirits has been documented for thousands of years, and, despite recent news articles suggesting slower beverage alcohol sales, we don’t believe Pennsylvanians are going to dramatically change consumption anytime soon,” he notes. “We evolve our product assortment in line with consumer tastes and trends, and we hope to offer a wide variety of products and price points to satisfy customer curiosity and enjoyment.”
Tequila, RTDs, Minis
Despite a 1.2% spirits volume decrease in Virginia last year, spirits category dollar sales increased by 1% to $1.46 billion in the state. Tequila, RTDs, and the popularity of smaller bottle sizes led growth trends in Virginia in 2024. Tequila was Virginia’s fastest-growing category by cases sold for the second straight year with a 12.4% growth to 996,000 cases.
“Growth of small sizes, such as the 50-ml. and 200-ml. sizes, increased their share of bottles sold at the expense of the 1.75-liter size,” says Virginia ABC CEO Dale Farino. “Premixed cocktails continue to rise and are currently one of the fastest growing categories in terms of percentage of sales, though that percentage comes from a much smaller base of sales than other leading categories.”
Another contributing factor to growth was vendor-driven price increases in fiscal year 2024, though they were smaller in value and less frequent than in previous years with vendors fighting to maintain market share. “We plan to offer discounted sales around popular drinking occasions to drive customer engagement, increase foot traffic to our stores, and encourage customers to try new products,” Farino says.
The Virginia ABC’s main marketing and merchandizing plans to enhance spirits sales this year include its annual Black Friday-Cyber Monday sale. “It’s a four-day sale giving plenty of time to shop, and the deals are typically on our top-selling brands,” Farino says. “It’s a popular time for consumers to stock-up on their favorites.”
The spirits industry is under pressure, but positive signs exist, including strong trends for Tequila, RTDs, Bourbon, and mini bottles. Although Tequila consumers are gravitating from the high-end toward the premium pricing tier, the 7.4% sales increase last year outpaced a 6.2% volume gain in control states. “Things are still positive, but we’re going to have a bit of correction,” NABCA’s Jackson says. “We’re going to turn around to positive, but it’s a question of in six or 12 months.”