US Alcohol Market Decline Slows: Bar Channel More Resilient than Retail

The sales pressure in the US wine and spirits market is not over yet. However, the data for the second quarter of 2026 reveals that the contraction has slowed for the third consecutive month, particularly showing that bars, restaurants, and other on-premise consumption points have performed more resiliently compared to retail.

According to SipSource data from the Wine & Spirits Wholesalers of America (WSWA), the combined 12-month volume of wine and distilled spirits decreased by 6.5% as of the end of June compared to the same period last year. In April, the decline was 7.1%, and in May, it was 6.9%. In the same measurement, revenue loss also decreased from 6.1% in April to 5.5% in June. Therefore, the market is still shrinking; what has changed is the speed of the contraction.

There is an important distinction here. The 6.5% figure in the headline of The Spirits Business news is not solely related to the distilled spirits category. According to WSWA's primary data, the 12-month volume of distilled spirits decreased by 4.9%, while the decline in wine was 8.2%. The revenue for distilled spirits also fell by 6.1%.

Why is the Bar and Restaurant Channel Noteworthy?

The most striking aspect of the second quarter results from the HORECA side is the channel differentiation.

According to SipSource, the combined volume of wine and distilled spirits in the on-premise channel, which includes bars, restaurants, and similar consumption points, decreased by 2.5% in the last 12 months. The decline in the off-premise, defined as the retail channel, reached 7.3%. Specifically for distilled spirits, revenue decreased by 3.6% in the on-premise channel, while it fell by 6.7% in retail.

This picture does not mean that bars and restaurants are entering a growth phase. However, there is a channel difference indicating that consumers have maintained their out-of-home drinking habits more strongly compared to purchasing bottles for home consumption.

Two possible explanations stand out for operators. First, out-of-home consumption is not solely about the product purchase decision; service, social environment, cocktail preparation, and experience are also part of the price. Secondly, even if consumers drink less frequently, they may not completely stop spending during certain outings. Therefore, the value of the bar program is derived not just from the bottle brand or discounts, but from the entirety of the consumption moment.

It’s Still Early to Say “Recovery Has Begun”

WSWA does not interpret the current data as a definitive turnaround. The organization reminds that the 12-month volume loss was around 5.2% by the end of summer 2025, followed by a deterioration in conditions in the second half of the year and the first months of 2026. Therefore, while the June results show improvement compared to the lows, it does not mean a return to the previous year's volume.

The broader US alcoholic beverage market also requires similar caution. According to IWSR's finalized 2025 data, the total alcoholic beverage volume in the US decreased by 5%; the decline in distilled spirits was 4%. In contrast, distilled spirits-based RTD products grew by 14%. IWSR also notes that consumers in the US are drinking less frequently and consuming fewer drinks at a time.

The most frequently cited reason for drinking less in IWSR's consumer research was cost; 31% of US drinkers pointed to price and economic pressure in their moderation decisions. The same research shows that consumers are not automatically shifting to cheaper products in every category, but are more frequently questioning the value of the price they pay.

Product Mix in Distilled Spirits is Reshaping

Not all subcategories of distilled spirits are moving in the same direction according to SipSource data. Unflavored vodka and añejo tequila are among the segments showing relative improvement in the second quarter. While the 12-month revenue decline for añejo tequila was 15.6%, the loss narrowed to 6.6% in the last three months.

On the other hand, RTD products continue to differentiate from classic bottled categories. According to IWSR, the volume of distilled spirits-based RTDs grew by 14% in 2025, while their share in the total RTD category of the US alcoholic beverage volume increased from 6% in 2019 to 13% in 2025.

Long-term forecasts also indicate that the change in consumption patterns may not be temporary. According to Reuters, which reports IWSR's forecast covering 160 markets, the global alcoholic beverage volume is expected to continue to decline until after 2031; in major markets like the US and China, a significant decrease in the total number of servings consumed is expected by 2035. New formats like RTD are predicted to gain share from classic beer, wine, and distilled spirits.

For Bar Operators, the Issue May Not Be Selling More Bottles

US data does not directly overlap with the Turkish market; tax structures, purchasing power, distribution systems, and consumption cultures differ. However, the emerging operational signal is significant on an international scale.

The response to volume pressure for bars and restaurants does not have to be solely promotions or price reductions. Portion economics in cocktail menus, contribution margins per product, low-alcohol options, the correct serving of premium spirits, and fast-service formats like RTD can be evaluated together.

The same applies to the purchasing side. Carrying a wide product range in a market where demand is slowing can tie up more stock. The 120 basis point improvement in the number of distribution points for distilled spirits since January is seen as a sign that portfolio simplification is beginning to balance.

The role of bartenders and service teams is also growing here. In an environment where consumers are more selective, product knowledge, recommendation competence, accurate portioning, and the ability to offer alternatives can be directly linked to sales performance. In a market where drinking is less frequent, the goal may not be to sell more drinks to customers, but to establish the value, margin, and experience of the preferred beverage correctly.

Stafflink's Perspective

The most important signal from the US data is the performance difference between channels rather than the volume growth itself.

The more limited contraction of bars and restaurants compared to retail highlights the value that physical dining establishments offer beyond the product. The social environment, service, bartender knowledge, and a well-designed beverage program may remain among the elements that consumers continue to pay for even under budget pressure.

However, interpreting a few percentage points of improvement as "the alcoholic beverage market has recovered" would be premature. The decrease in consumption frequency in the US, the gaining share of RTDs, and economically driven moderation necessitate a reevaluation of product and channel strategies.

In our view, the advantage for bar operators in the upcoming period will not be in having a wider stock; rather, it will be in creating a more accurate product mix, better-trained teams, controlled portioning, and an experience that can justify its price from the customer's perspective.