What are the most important trends that we can expect in the next year, given the consumer’s sentiment and the market’s behaviour? Here are the top five trends in alcohol and beverages to watch for in 2025.
1. Beverages Ready to Drink
RTDs (Ready-to-Drink Beverages) are among the fastest-growing segments of the beverage industry. And, as we’ve seen above, this trend is expected to continue. We’re not talking only about White Claw or Truly. More and more high-end RTD cocktails have entered the market. This gives people the chance to enjoy high-quality products without having to go to a bar.
The RTD cocktail market is expected to grow rapidly. The global market is worth over $1 billion, and it is expected to double (to $2.23 billion) by 2029.
It’s not surprising that big brands want to take advantage of their brand recognition. RTD beverages are a hot commodity, whether they’re traditional non-alcoholic brands that tap into nostalgia—like Sunny D or Welch’s—or classic spirits companies forming new crossover partnerships.
This category will continue to grow as it offers convenience, portability and the ability to try new things.
2. Agave-based Spirits
Since the 1970s, agave-based spirits like tequila have seen a boom. They are expected to continue on their upward trajectory. It’s no wonder that almost all celebrities have their own mezcal or tequila brand. In recent years, the American appetite for Mexican spirits has been insatiable.
In 2024, tequila will surpass vodka as the most popular spirit in American bars. In an industry survey, 54% of bars reported that tequila was the most popular liquor last year. 64% plan to increase their tequila and other agave spirit offerings in the coming year.
It’s not all about the tequila. Mezcal’s popularity is also exploding. According to Mezcalistas – an industry watcher – production has increased steadily over the last ten years, increasing 743.12% during that time. Production has exploded in recent years. In 2023, production was 51.11 per cent higher than two years earlier.
Mezcal Production, Liters Produced from 2014-2024
The numbers indicate that the majority of the increase in production is being exported, mainly to the US. Mexico’s domestic mezcal consumption rose by 3.10% between 2021 and 2023, while the US saw a 53.45% increase.
The popularity of agave spirit is not likely to diminish anytime soon.
3. Premiumization
The alcohol industry has been experiencing a trend of premiumization in recent years. This is the consumer’s habit of buying fewer, higher-quality products for more money. This concept is closely related to the trend towards consumers drinking less. If people drink less and less often, they might be more willing to pay more for alcohol when they decide to consume it.
In fact, younger people are more likely to choose premium products than older groups. A report by Curren Goodden Associates shows that 54% of 18 to 34-year-olds will choose premium drinks compared to 35% for those older than 55. A survey by Bacardi conducted in 2023 revealed that 41% of US consumers aged between 21 and 44 were planning to “seek out more premium spirits” for 2024.
Will this trend of premiumization continue? Some indicators suggest that it may already have passed its peak. IWSR reported that premiumization for premium spirits and wine has slowed, with volume for each dropping by 3%. Premium beer, however, saw its volume grow by 2% during the same period.
WSWA found that premium category sales were also declining. The $100+ category fell 8.5% in 2024 compared to the previous year, and the $50-$99.99 tier dropped 4.3%. The analyst also noted a shift in the industry towards “affordable” luxury categories, i.e., those priced between $17-24.99 and $25-49.99.
The future of premiumization could be a shift to more modest options.
4. Non-Alcoholic Alternatives
While premium alcohol struggles, non-alcoholic drinks are thriving. This trend is likely to continue as young Americans tend to refrain from drinking.
When we refer to non-alcoholic drinks, we mean specifically non-alcoholic wine, beer, and spirits.
This growth is largely driven by younger generations, with Millennials (45%) and Gen Zers (17%) accounting for almost two-thirds of the non-alcoholic drinks consumed. The younger generations are largely responsible for this growth, with Millennials (45%) and Gen Zers (17%) having reached the legal drinking age, accounting for nearly two-thirds of the total.
What’s hot in the non-alcoholic segment of the market?
Non-Alcoholic Alcohol
In 2023, non-alcoholic beverage sales in the United States grew by 29%. This growth far exceeded that of low-alcohol beverages, which grew at an impressive 7%.
The volume of this subcategory increased by 30% in the past year. NA RTDs increased by 36%, while NA spirits and NA wine both grew by 18%.
Functional Beverages
Functional beverages, also known as alcohol-adjacents, are a rapidly growing option in the NA market. This subcategory contains beverages that contain some sort of mood enhancer or nutritional supplementation, like CBD/THC. This relatively new category is expected to grow by 15% by 2023.
Although this category is growing at a slower rate than the other non-alcoholic subcategories, a much higher percentage of consumers have purchased beverages in this segment, which puts it ahead of other NA categories. From March 2020 to March 2024, sales grew by 54% and reached $9.2 billion, a growth rate faster than the NA beverage market’s (43%). Functional beverages are already about 10% of the total NA beverage market.
Other NA Trends
What other trends are popular in the non-alcoholic beverages space? The National Restaurant Association has identified five trends that will be big in 2025.
- Cold Brew
- Wellness Drinks with vitamins, supplements or fibre
- Boba
- Fermented drinks/Kombucha
- Energy Drinks
No list of NA drinks today would be complete if it didn’t include dirty soda. These creamy, soda-based concoctions have been a social media sensation. At the height of the phenomenon, Yelp reported an increase of 609% in searches YoY.
Will the trend continue in 2025? Who knows? The trend towards non-alcoholic drinks is not going away.
5. Niche Spirits are on the Rise and Fall
What other spirits should consumers be looking out for in the year 2025? Here are three spirits that are on the rise and three that have fallen out of fashion.
Spirits on the Rise
- Jeppson’s Malort may be the most unlikely sensation in the world. This wormwood-flavoured liqueur, once referred to as “the worst alcohol ever”, was little known outside of Chicago. However, its unique taste has caught the public’s attention and led to a 1,875% increase in sales between 2007 and 2020.
- Applejack is another old-time American favourite that’s seeing a revival. This colonial-era drink was traditionally made by freezing hard apple cider and draining the alcohol. Today, it is essentially the same thing as Apple Brandy, but it still has a special all-American aura. For many years, only one distillery produced the spirit. In recent years, more distilleries have revived this tradition.
- Soju, a Korean spirit that has recently gained popularity, is a great alternative to American-made spirits. This distilled rice drink, which is gaining popularity in the US, was born out of a growing interest in Korean culture. The US soju market is expected to reach $425.8 million by 2031.
Spirits on the Decline
- In recent years, the popularity of some spirits has declined. The American whiskey segment is notable; spirits wholesalers are seeing a steep decline in depletions, a measure of consumption. This segment is expected to reach -6.82% YOY by mid-2025. This is a steeper decline than expected for the overall spirits market, which is forecast to fall by -5.59% in the same timeframe.
- Cognac is faring even worse. The trend is continuing. In 2022, 2023 and 2024, US cognac volume dropped by 20% and 16%, respectively. Commentators believe that the sudden increase in tequila could have contributed to cognac’s fall.
- The American craft spirit industry has experienced a significant slump in recent years. Craft Spirits Data Project, which began in 2016, has been measuring the performance of the US Craft Spirits market. In 2024, it found that sales volume (-3.6%) and market value (-11.1%) had decreased YoY for the first time since the CSDP’s creation. Craft spirits saw a declining market share in comparison to larger producers.
