IWSR: spirits ‘worst performing’ category in 2025
Why does this matter?
This comprehensive market analysis from IWSR reveals critical beverage alcohol trends—including declining spirits performance, RTD growth opportunities, and shifting consumer behaviors around premiumization and health—that BevTech founders need to understand for product-market fit and go-to-market strategy.
Highlights
Total beverage alcohol (TBA) volumes fell by 2% in 2025, with spirits suffering the biggest value drop, according to IWSR data. IWSR revised its 2025 estimate of global alcohol volumes to drop by 0.5% in November last year, lower than its initial 0.2% forecast. The revised forecast still fell short, however, with IWSR finding that across the world’s top 22 markets, including global travel retail, TBA volumes fell by 2% in 2025. TBA value, meanwhile, fell by 4%, which was attributed to a decline in the consumption of 'national spirits', such as baijiu in China. Excluding national spirits, 2025 TBA value was flat. The 22 countries in IWSR’s analysis account for roughly 75% of the global market, and include Australia, Brazil, the US, the UK, Germany, India, France and China. IWSR president and managing director Marten Lodewijks called 2025 "a particularly difficult trading environment for the beverage alcohol industry". He said: "In addition to continued economic challenges, the imposition of sweeping US tariffs and subsequent retaliatory measures caused severe disruption across the sector. “Continued increases in the cost of living also put further pressure on discretionary spending, which includes beverage alcohol purchases, while a growing consumer focus on health, wellness, and moderation added further to the difficult market conditions.” A number of the world's largest markets saw declines in both volumes and value last year. This was because of ‘high inflation, political polarisation and international conflict’, IWSR noted, which have dampened consumer confidence and reduced spending. In the US, volumes were down by 5% and value by 4%, while volumes in Brazil dipped by 4% and value by 3%. The world’s largest TBA market, China, saw volumes drop by 2% and value fall by 12%. Excluding national spirits (like baijiu), the country’s volumes were down by 1% and value was flat. On the flipside, there were emerging markets that saw growth. South Africa was up in volume by 4% and in value by 12%. India also showed promise, increasing volumes by 4% and value by 5%. Spirits: 'Worst performing major category' IWSR labelled spirits the ‘worst performing major category’ for TBA in 2025. The segment's volumes were down by 4% and value by 9%. Excluding national spirits, the decline was less harsh, by 1% for both volume and value. For wine, volume dropped 4% and value by 2%. Beer’s 2025 was then described as a ‘mixed year’ with a 2% volume drop and flat value. The IWSR singled out vodka for declines in both areas, by 3% in volume and 1% in value. For growth, Indian whisky was highlighted with a volume gain of 2%, while value grew by 3%. IWSR also noted that its preliminary data showed an ‘especially good year’ for some subcategories. One of those was Irish whiskey, which gained 2% in volume and value, despite a 3% drop in the US – its biggest market. Last year, IWSR forecasted global ready-to-drink (RTD) volumes to rise by 1.3% in 2025. The category exceeded this with a 2% increase in volumes and a 4% gain in value. It was also the only major category to experience growth in 2025 across the 22 markets listed. South Africa, Canada and Japan were highlighted for strong showings in the RTD segment, but in the US, which is the category's biggest market, there was a 1% decline in volume with value flat. Luke Tegner, IWSR head of global consulting, added: “The long running trend of customers upgrading to higher quality products, known in the beverage alcohol industry as ‘premiumisation’ has been overshadowed by rising prices, alongside a consumer focus on optimising value for money spent.” In the first six months of 2025, TBA volumes fell by 1%, but total spirits volumes were up 1% excluding national spirits. In 2024, global alcohol volumes were down by 1%.
The Spirits Business
