Global Spirits Industry Faces Oversupply Amid Declining Demand
Distillers around the world are grappling with a surplus of aged spirits such as cognac, Irish whiskey, and Scotch whisky due to declining demand. Companies had ramped up production between 2021 and 2024 during an industry boom but now face oversupply after consumption dropped sharply. Rémy Cointreau reported a 40% decline in sales since peaking in early 2023, highlighting the severity of the issue. External factors like U.S.-imposed tariffs on EU imports and trade tensions with Canada have further strained European distillers such as Diageo and Rémy Cointreau. In China, weak consumer sentiment has also reduced demand for high-end cognac. Meanwhile, shifting attitudes toward alcohol moderation in the U.S., where 54% of Americans now report drinking less than before, are compounding challenges. Younger consumers—particularly Gen Z—are favoring low-alcohol or nonalcoholic drinks and ready-to-drink (RTD) cocktails over traditional spirits. This trend is forcing distillers to adapt with new formats like flavored spirits and RTDs.
