Are Californians over tequila? A new report indicates that Californians’ thirst for spirits has declined, fueled by a drop in agave spirit volumes. But that’s not the entire story.
The report from market research firm IWSR shows that the evolution of wine, beer and ready-to-drink consumption in California broadly followed national trends between 2019 and 2024, but spirits volumes fell by 9%, compared to a 3% dip across the country. Higher-priced beer, wine and spirits are still proving resilient, added the report, with ready-to-drink (RTD) booming.
“In 2024, U.S. spirits volumes excluding California remained above 2019 levels – but California is dragging the national figures down,” wrote Marten Lodewijks, president of the U.S. at IWSR. “Its underperformance is not reflective of broader category weakness, but more likely a state-specific consumer shift or economic pressures.”
Niche Tequila Styles Rise Among Broader Declines
California is known as a trendsetter and a core market for agave, but the data paints a surprising picture: since 2021, the state has lagged in agave spirits volume growth compared to the rest of the country. That may be due to California consumers searching for the next trends: while core agave categories (blanco and gold) are underperforming, niche styles, including cristalino and flavoured tequilas are holding steady or outpacing the rest of the country’s growth trends – but the base volumes of those sub-categories aren’t enough to compensate for the broader losses.
The trends align somewhat nationally with the uptick in reposado at the expense of blanco and gold especial, according to NIQ’s CGA.
“The spirits slowdown in California should not be seen as a rejection of the category, but as a reflection of shifting consumer priorities,” wrote Lodewijks. “Legacy formats like standard tequilas are losing traction, while niche expressions are growing, but cannot carry the category on their own.”
Meanwhile, RTDs, adult-non alc (ANA), and low-alc volumes are disproportionately strong in California, added the report, implying that drinkers may be substituting spirits, especially vodka and whisky. Sharper declines for vodka and flavoured spirits, and softer market trends for whisky, brandy and gin were recorded in the state as well.
RTDs Outperform; Beer and Wine Mirror National Trends
California has slightly outstripped the national growth rate for RTDs (+87%) with volume surging 89% between 2019 and 2024. While this expansion has been spearheaded by the standard and value price tiers, premium RTDs have tripled in volume since 2019, added the report, providing “strong opportunities for new, upscale RTD offerings.”
Beer and wine declines in California mirror national trends: volumes for beer fell 14% in the state between 2019 and 2024, versus a 13% contraction across the U.S. Wine volumes also dipped 14% with the national rate falling 15% in the same time period.
Wine’s largest volume losses were in the standard and low-price tiers. Beer volume was dominated by the value segment, but premium and super-premium beer volumes grew steadily between 2021 and 2024, “suggesting that higher-end beer is weathering category pressures better than mid-range or value options.”