Wine and Spirits Contraction Continues with March Improvement and RTD Momentum

WSWA SipSource^® Q1 2026 Data Released

WASHINGTON, May 21, 2026 /PRNewswire/ -- The U.S. beverage alcohol industry remains in a continued contraction across core spirits and wine, according to first quarter SipSource^® data from Wine & Spirits Wholesalers of America (WSWA). Cumulative inflation now including rising gas prices, tight inventories and consumer trade-down behavior continue to pressure all three tiers, although March 2026 provided a modest sign of improvement—particularly for wine revenue and on-premise channels—partially influenced by calendar timing and one additional shipping day compared to Q1 2025.

"The current environment reflects tighter portfolio management, ongoing SKU rationalization and more value-oriented consumer behavior," said SipSource analyst Danny Brager. "At the same time, spirits-based ready-to-drink cocktails (RTDs) remain a bright spot—but in an increasingly crowded segment where innovation, positioning and disciplined execution matter more than ever," he continued.

Core spirits closed Q1 down -4.4% in volume and -5.7% in revenue on a 12-month basis, while wine closed the quarter down -8.3% in volume and -5.3% in revenue. The data also points to premiumization pressure in key categories: spirits are de-premiumizing across price tiers and several key segments, such as Tequila, with pressure in the $50+ range. While table wine's volume decline continues to fall faster than its revenue trend, the higher end price tiers are only performing "relatively" better than the lower end but still not growing, and significant discounting is still apparent at the higher end, raising fresh questions about the strength of premiumization in wine.

"SipSource gives the industry a clear picture of where pressure is persistent, where trends may be stabilizing, and where pockets of growth are emerging across categories, channels and price tiers," said Eric Schmidt, WSWA's Director of SipSource.

Spirits-based RTDs continue to significantly outperform broader beverage alcohol trends. The segment now represents a meaningful and growing share of the alcohol landscape, but with more than 750 spirits-based prepared cocktail brands in an increasingly crowded category, competition is intensifying as suppliers chase sustained consumer demand.

Watch: SipSource Analysts Breakdown Q1 2026 Industry Trends

Distribution and Channel Trends

Points of distribution (POD) continued to decline in Q1, though the pace moderated from earlier periods. PODs were down -3.2% in the most recent period, compared with a peak decline of -5.0% back in 2025, reflecting continued SKU rationalization and inventory adjustment across retail and on-premise accounts. Total accounts remain down -0.5%.

Combined wine and spirits on-premise volume declined -3.0%, continuing to outperform off-premise, which declined -7.4%. Despite higher rates of inflation "away from home" compared to "at home," on-premise trends have improved gradually over the past year, while off-premise softness has remained more persistent.

Spirits: Value-Oriented Purchasing Continues

Total spirits ended Q1 down -5.1% in volume and -5.9% in revenue. The 130-basis-point gap between core spirits volume (-4.4%) and revenue (-5.7%) represents the widest spread recorded in SipSource data and underscores continued consumer movement toward lower-priced products. The $50–$99.99 tier declined -8.8%, while the $100-plus tier declined -9.3%.

Tequila and agave spirits, which expanded from 9.4% to 13.3% of core spirits volume over the past six years, declined -3.0% in volume and -6.6% in revenue in Q1. One year ago, luxury tequila revenue trends were growing at +4.2%.

Wine: Revenue Trends Improve Modestly While Volume Remains Soft

Wine revenue trends improved 80 basis points from the end of 2025, closing March at -5.3%, while volume remained down -8.3%. The sub-$5.00 tier, which represents 22.2% of all wine volume, declined -19.1%.

Wine segments posting positive revenue growth included wine-based cocktails (+11.8%), Prosecco (+6.1%), Champagne (+2.0%), Sauvignon Blanc (+1.1%), and Sake (+1.3%)

On-premise wine revenue declined -2.3%, compared with -6.0% in off-premise channels.

RTDs Continue to Outperform Broader Beverage Alcohol Trends

Spirits-based RTDs increased +30% on dollars and now account for 28% of total spirits volume in the off-premise channel. Wine-based RTDs increased close to +14%, while malt-based RTD—still the largest segment of RTD dollars—continued to decline, according to NIQ.

The SipSource Q1 2026 Industry Overview is available to subscribers through the iDIG platform. Contact Eric Schmidt to learn more.

About SipSource^®
SipSource^® provides trusted wine and spirits market insights using aggregated distributor depletion data. Covering over 70% of wholesale volume across all 50 states, it offers broad industry visibility. Sourced directly from WSWA family-owned distributors and never sold to third parties, it delivers verified data for historical analysis and forward-looking forecasts.

About WSWA
Wine & Spirits Wholesalers of America (WSWA) is the national trade association representing the wholesale tier of the wine and spirits industry.

To learn more, please visit www.wswa.org or connect with us on LinkedIn, Facebook or Twitter.

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SOURCE Wine & Spirits Wholesalers of America