America's liquor landscape is undergoing a dramatic transformation. While heritage spirits that once dominated bar carts are losing ground, a wave of new drinking preferences—driven by younger consumers and innovative formats—is reshaping the U.S. spirits market.
The shift is stark: ready-to-drink cocktails have surged to rival vodka in volume, tequila continues its decade-long climb, and traditional powerhouses like whiskey and rum are posting their steepest declines in years.
Behind these numbers lies a generational divide that reveals not just what Americans are drinking, but how and why their choices are evolving.
Using the latest volume data from the Distilled Spirits Council (DISCUS) and consumer preference surveys from 2023–2024, this analysis identifies which liquor categories are experiencing growth, which are contracting, and how demographic shifts are driving these trends.
Key Data Points at a Glance
- RTDs grew 17% year over year, now rivaling vodka in total volume
- Tequila is the only traditional spirit showing growth, rising 2% between 2023–2024
- Vodka (-1.1%), whiskey (-2.7%), and rum (-8.9%) all declined in U.S. volume
- Millennials are driving tequila's rise, with 30% naming it their preferred spirit
- Gen Z leads RTD consumption, with 34% preferring ready-to-drink formats
- Rum shows the widest generational divide, with only 7% of Gen Z preferring it
- Low- and no-alcohol beverages grew ~15%, driven by Gen Z and younger Millennials
RTDs Reshape the American Spirits Market
Ready-to-drink cocktails have emerged as the undisputed growth leader in the U.S. spirits industry, posting a 17% year-over-year increase according to DISCUS volume data.
This category—which includes canned cocktails, hard seltzers, and premixed drinks—now represents over 73 million 9-liter cases, positioning it nearly equal to vodka in total market volume. This is a remarkable achievement for a category that barely existed a decade ago.
The RTD surge reflects fundamental changes in consumer behavior. Younger drinkers gravitate toward convenience, portion control, and lower-commitment drinking occasions. The appeal extends beyond just ease of use—RTDs offer consistent quality, clear nutritional information, and the ability to try premium cocktails without the need for home bartending skills or expensive bar visits.
Generational preference for RTDs:
- Gen Z: 34%
- Millennials: 22%
- Gen X: 11%
- Boomers: 5%
This growth trajectory suggests RTDs are not a passing trend but a permanent fixture in the American spirits landscape. They're capturing market share from traditional categories and attracting consumers who might otherwise choose beer or wine.
The format has also attracted major spirits companies to enter the space, with established brands like Jose Cuervo, Jack Daniel's, and Grey Goose all launching canned cocktail lines. This mainstream adoption signals that RTDs have moved beyond novelty status to become a core strategy for spirits brands looking to reach younger consumers.
Tequila Stands Alone Among Traditional Spirits
While most heritage spirit categories contracted in 2023–2024, tequila and agave spirits grew 2%—making them the only traditional liquor category posting positive growth.
This resilience continues a multi-year trend that has seen tequila transform from a shot-oriented party spirit to a premium sipping category.
Generational preference for tequila/agave spirits:
- Millennials: 30%
- Gen Z: 20%
- Gen X: 16%
- Boomers: 8%
Millennials are the engine behind tequila's success, with 30% naming agave spirits as their preferred category—the highest rate of any generation.
The premiumization of tequila, including the rise of high-end añejo and cristalino expressions, has broadened its appeal beyond its traditional margarita association. Consumers are increasingly seeking out single-estate tequilas, exploring different production methods, and treating premium tequila as a sipping spirit comparable to fine whiskey.
This shift has been accompanied by significant investment in tequila distilleries, expansion of production capacity in Jalisco, and growing interest in lesser-known agave spirits like mezcal and raicilla. The category has successfully positioned itself at the intersection of craft authenticity and luxury consumption.
Industry observers note that tequila's growth aligns with broader cocktail culture trends, increased interest in spirits with terroir and craftsmanship narratives, and effective celebrity brand partnerships that have elevated the category's profile.
Whiskey, Vodka, and Rum All Decline
The past year brought disappointing news for several major spirit categories that have long dominated American consumption.
Whiskey / Bourbon (-2.7%)
Whiskey and bourbon declined 2.7%, a notable drop for a category that experienced rapid growth during the craft spirits boom of the 2010s.
Survey data reveals whiskey's challenge: its core audience is aging.
Generational preference for whiskey/bourbon:
- Gen X: 30%
- Boomers: 23%
- Millennials: 22%
- Gen Z: 11%
Only 11% of Gen Z prefers whiskey, suggesting the category may struggle to attract replacement consumers as its primary demographic ages.
The whiskey category's challenges are compounded by shifting cultural associations. While bourbon and whiskey once represented aspirational sophistication for younger drinkers, that perception has increasingly moved toward tequila and craft cocktails. The category may need to reimagine its positioning to connect with consumers who view traditional whiskey culture as outdated or inaccessible.
Vodka (-1.1%)
Vodka slipped 1.1% despite maintaining relatively balanced appeal across generations.
Generational preference for vodka:
- Millennials: 26%
- Gen X: 19%
- Gen Z: 18%
- Boomers: 12%
While the decline is modest, it represents a significant shift for a category that has historically dominated the U.S. spirits market.
Rum (-8.9%)
Rum experienced the steepest contraction at -8.9%, and demographic data suggests recovery may prove difficult.
Generational preference for rum:
- Gen X: 15%
- Boomers: 13%
- Millennials: 11%
- Gen Z: 7%
The category shows its strongest appeal among Gen X and Boomers, while only 11% of Millennials and just 7% of Gen Z prefer rum—the widest generational gap of any major spirit.
Without successful repositioning efforts targeting younger consumers, rum's trajectory appears challenging. The category faces a perception problem: it's often associated with spring break excess or overly sweet drinks rather than craft sophistication.
Some rum producers are attempting to reverse this trend by emphasizing premium aged rums, terroir-driven production, and the spirit's Caribbean heritage. However, these efforts have yet to gain significant traction with younger American consumers who have largely moved on to other categories.
The Rise of Moderation and Low-ABV Options
Low- and no-alcohol beverages grew approximately 15% during the study period, representing another significant shift in American drinking culture.
Generational preference for low-ABV/non-alcoholic options:
- Gen Z: 24%
- Millennials: 18%
- Gen X: 9%
- Boomers: 5%
This trend is overwhelmingly driven by younger consumers, reflecting broader wellness trends, increased awareness of alcohol's health impacts, and social acceptance of choosing not to drink or to drink less.
The emergence of sophisticated non-alcoholic spirits and premium low-ABV cocktails has made moderation more socially acceptable and experientially satisfying. Brands like Seedlip, Ritual, and Athletic Brewing have demonstrated that non-alcoholic options can command premium pricing and deliver complex flavor profiles.
This shift also reflects changing social dynamics. Younger consumers are less likely to view drinking as essential to socializing and more willing to prioritize health and wellness over alcohol consumption. The "sober curious" movement has gained cultural cachet, making it socially acceptable—even aspirational—to order a non-alcoholic drink at a bar or social gathering.
Industry analysts note this trend doesn't necessarily represent abstinence but rather "sober curious" behavior and occasion-based moderation. These are consumers who drink less frequently or alternate between alcoholic and non-alcoholic options.
What These Trends Mean for the Spirits Industry
The data reveals an industry at an inflection point.
RTDs have graduated from novelty to necessity, forcing traditional spirit brands to develop canned extensions or risk losing younger consumers entirely.
Tequila's sustained growth demonstrates that traditional spirits can thrive when they successfully balance heritage with premiumization and cultural relevance.
Conversely, whiskey's demographic concentration among older consumers and rum's failure to connect with Gen Z present strategic challenges.
Both categories may require significant repositioning efforts—whether through product innovation, format changes, or marketing approaches—to reverse declining trajectories.
Perhaps most significantly, younger generations appear to be drinking less overall while favoring lighter, more convenient, and lower-alcohol options.
This shift toward moderation and conscious consumption represents both a challenge for traditional spirits brands and an opportunity for innovation in formats, flavors, and drinking occasions.
As generational preferences continue to reshape the American spirits market, brands that successfully adapt to these evolving tastes—while maintaining authenticity and quality—will be best positioned for growth in an increasingly fragmented industry.
