Who is retreating, and who is making a comeback? Examining the divergent trends in the spirits industry through Brown-Forman’s 4% profit decline from May to July

Behind the 4% profit decline lies multi-dimensional divergence across the spirits industry—in categories, markets, brands, and business models. Traditional spirits face growth bottlenecks, while on-premise products, emerging markets, and brand innovation have become critical pathways for industry breakthroughs. Winners and losers are no longer defined by brand size, but rather by the lifecycle stage of their category, cost-control capabilities, and channel sales efficiency. Is tequila’s retreat dragging down the entire sector—and has it become a loser amid category divergence? Brown-Forman attributed its profit decline in its earnings report to three factors: termination of the Korbel champagne partnership, reduced sales of second-hand barrels, and weakness in the tequila category. The first two reflect short-term pains from structural adjustments; tequila’s softness, however, reveals a deeper shift—the category that once spearheaded the premiumization wave in spirits post-pandemic is now undergoing a cyclical reversal, transforming from a growth engine into a drag on performance. Brown-Forman’s tequila portfolio has recorded a low double-digit decline. Data shows net sales of its tequila brands fell 12% (down 13% organically). This is not an isolated case: across the global tequila supply chain, Mexican tequila production peaked at 651.5 million liters in 2022, then declined continuously—reaching 495.8 million liters in 2024, a nearly 24% drop over two years. On the raw-material side, prices in tequila’s core growing regions have plummeted from nearly 32 pesos per kilogram in 2022 to under 5 pesos—a decline exceeding 80%. Severe oversupply on the production side is now compounding with saturation on the demand side. Viewing tequila within the broader landscape of spirits category divergence, vodka—though also in negative territory—maintains broad appeal due to its versatility in cocktails and high value-for-money positioning. Whisky, meanwhile, retains resilience thanks to its aging value and collectibility; U.S. and Scotch whiskies are expected to gradually improve. Tequila, by contrast, sits squarely in a ‘double-hit’ quadrant—oversupplied *and* demand-saturated—with neither hard-currency status nor time-based barriers to entry. Peer data further validates this assessment: Diageo’s tequila brands likewise show slowing or declining growth. Its North American tequila sales dropped ~21% year-on-year, with flagship brand Casamigos down 27.7% and Don Julio down 19.2%. Pernod Ricard’s acquired tequila portfolio also faces sluggish sales momentum. Even Becle—a company focused exclusively on tequila—has seen improved gross margins due to falling agave costs, yet volume growth remains feeble, underscoring how cost advantages cannot offset the structural challenge of weak demand. Whisky growth stalls, while niche brands show divergent performance Industry data indicates that global premium spirits sales (priced above USD 100) declined 8% in 2024, with value eroded by nearly USD 1 billion. Whisky, backed by aging value and collectibility, maintained relative resilience during the downturn—its time-based barrier offering natural cushioning. Yet resilience comes with a cost: although Brown-Forman’s gross margin expanded to 60.2% this quarter, expensive aged whisky inventory will progressively enter cost accounting in coming quarters, pressuring future margins. Aging inventory—a moat in periods of strong demand—can turn into a cost trap when demand softens. In other words, the inherent strengths and weaknesses of a category can reverse with the cycle.

2026 Global Blanco Tequila Market Research Report

11.8.2 Key Blanco Tequila Manufacturers in the South Korean Market and Their 2025 Market Shares 11.8.3 Market Shares of Different Blanco Tequila Product Types in the South Korean Market (by Volume), 2025 vs. 2032 11.8.4 Market Shares of Different Applications of Blanco Tequila in the South Korean Market (by Volume), 2025 vs. 2032 11.9 Southeast Asia 11.9.1 Blanco Tequila Market Size in Southeast Asia (by Volume), 2021–2032 11.9.2 Key Blanco Tequila Manufacturers in the Southeast Asian Market and Their 2025 Market Shares 11.9.3 Market Shares of Different Blanco Tequila Product Types in the Southeast Asian Market (by Volume), 2025 vs. 2032 11.9.4 Market Shares of Different Applications of Blanco Tequila in the Southeast Asian Market (by Volume), 2025 vs. 2032 11.10 India 11.10.1 Blanco Tequila Market Size in India (by Volume), 2021–2032 11.10.2 Key Blanco Tequila Manufacturers in the Indian Market and Their 2025 Market Shares 11.10.3 Market Shares of Different Blanco Tequila Product Types in the Indian Market (by Volume), 2025 vs. 2032 11.10.4 Market Shares of Different Applications of Blanco Tequila in the Indian Market (by Volume), 2025 vs. 2032 11.11 Middle East & Africa 11.11.1 Blanco Tequila Market Size in the Middle East & Africa (by Volume), 2021–2032 11.11.2 Key Blanco Tequila Manufacturers in the Middle East & Africa Market and Their 2025 Market Shares 11.11.3 Market Shares of Different Blanco Tequila Product Types in the Middle East & Africa Market (by Volume), 2025 vs. 2032 11.11.4 Market Shares of Different Applications of Blanco Tequila in the Middle East & Africa Market (by Volume), 2025 vs. 2032 12 Profiles of Major Blanco Tequila Manufacturers 12.1 Becle 12.1.1 Becle: Basic Information, Blanco Tequila Production Bases, Sales Regions, Competitors, and Market Position 12.1.2 Becle’s Blanco Tequila Product Models, Specifications, Technical Parameters, and Market Applications 12.1.3 Becle’s Blanco Tequila Sales Volume, Revenue, Pricing, and Gross Margin (2021–2026) 12.1.4 Company Profile and Core Business of Becle 12.1.5 Latest Corporate Developments of Becle 12.2 Diageo 12.2.1 Diageo: Basic Information, Blanco Tequila Production Bases, Sales Regions, Competitors, and Market Position 12.2.2 Diageo’s Blanco Tequila Product Models, Specifications, Technical Parameters, and Market Applications 12.2.3 Diageo’s Blanco Tequila Sales Volume, Revenue, Pricing, and Gross Margin (2021–2026) 12.2.4 Company Profile and Core Business of Diageo 12.2.5 Latest Corporate Developments of Diageo

Mexican Tequila Giant Becle's Profits Slump Below Forecasts on US Drag

Apr 29, 2026

Mexican tequila producer Becle reported a 67% drop in Q1 net profit due to declining sales in the U.S. and Canada. Distribution restructuring and a contracting industry environment contributed to the volume shrinkage.

reuters

2026-04-29

Mexican Tequila Giant Becle's Profits Slump Below Forecasts on US Drag

2026-10-28

Sobering quarter for Jose Cuervo distiller as profit slumps

Mexican Tequila Giant Becle's Profits Slump Below Forecasts on US Drag

FAQ