Tequila sales decline as Margarita popularity wanes

The tequila and cocktail market is experiencing a shift in consumer preferences. Data from NielsenIQ’s BeverageTrak Cocktail Report indicates that the “dollar velocity” of Margaritas fell by 16% year-on-year in the US on-premise market during the final quarter of 2025. Margarita consumption among consumers aged 21 to 34 dropped by 28% over the last two years, as drinkers explore other categories like the Bellini, mimosa, and Old Fashioned.

This trend is reflected in the financial performance of major spirits producers. Diageo reported a 21% decline in its US tequila net sales for fiscal 2026. Specifically, the Don Julio brand saw a 19.2% drop in sales, following a period of significant growth. Casamigos also experienced a 27.7% decline in net sales.

Industry analysts suggest that while tequila remains a major category, its reliance on the Margarita may be a vulnerability. Experts note that the decline may be driven by broader lifestyle shifts, including wellness trends and the popularity of ready-to-drink cocktails, which saw a 35.1% increase.