The US market for tequila is in transition as growth stalls after years of dynamic gains. Renewal in Mexico and a basket of promising emerging markets, however, offer fresh opportunities – and challenges – for agave’s future.
In a mostly downbeat spirits market globally, tequila has been providing a much-needed source of growth, with gains outside the US hinting at the category’s gradual evolution to become a genuinely global phenomenon.
Between 2019 and 2025, according to the latest IWSR data, tequila volumes worldwide rose at a CAGR of 6% and are expected to expand at a 2% CAGR to 2030, an uplift on the 2% volume gain recorded last year.
The US – Tequila’s bedrock, but in transition
The US continues to dominate tequila’s overall performance, accounting for over two thirds of its volumes. The rapid gains experienced north of the border have effectively stalled, with volumes flat in 2024-25 and predicted to dip slightly this year.
This stagnation has consequences in a crowded marketplace. “With approximately 2,500 registered tequila trademarks, roughly 900 viable competitors in the US, and only approximately 500 generating more than US$10,000 in large retail, shelf space is highly contested,” explains IWSR‘s North American research director, Adam Rogers.
Beyond the flat headline numbers, however, the full story is more nuanced. Ultra-premium is the only price band growing strongly, albeit at a slower rate than in recent years: volumes in 2024-25 were up by 7%, capping a 31% CAGR gain since 2019. The price tier’s share of tequila volumes in the US has nearly tripled from 6% in 2019 to 17% last year – and is expected to reach 21% by 2030.
Meanwhile, super-premium tequila is contracting sharply, with volumes down 6% in 2024-25, and a further CAGR decline of 5% forecast to 2030. At the same time, premium is gaining ground – volumes were up 1% last year, which may mean that the category sweet spot is shifting towards accessible premium products.
Mexico’s revival
Tequila’s number two market, Mexico, has spent the last few years in relative stagnation, but now there are new signs of life: between 2019 and 2025, according to IWSR data, volumes declined at a CAGR of 2% but bounced back with a 3% gain in 2024-25. Growth is expected to continue domestically in the years to come, with a forecast CAGR gain of 3% to 2030.
Standard- and premium-priced products are spearheading this recovery, together adding the most volumes in 2025 – alongside strong gains for cristalino and premium-and-above plata tequila. Meanwhile, value- and low-priced products are losing market share.
“The 2026 FIFA World Cup should provide a meaningful near-term tailwind for tequila in Mexico,” notes IWSR‘s research director for Central & South America, Jose Luis Hermoso. “Meanwhile, a slower tequila market in the US, coupled with much lower agave prices for tequila production, will mean more focus by brand owners and producers on the domestic scene, which was neglected in the past when tequila was booming in the US.”
The emerging destinations of Asia, Africa, Latin America
As the tequila boom cools in the US, a host of emerging markets show promise – although they remain tiny by comparison. Chief among these is India, which stands out as the single fastest-growing major destination: volumes between 2019 and 2025 expanded at a CAGR of 32%, jumping last year by 34% and are predicted to rise at a CAGR of 13% to 2030.
Volumes in India remain relatively modest, but the trajectory is still striking, notes IWSR‘s senior research consultant Jason Holway. “Tequila’s growing popularity in India has coincided with a downturn in the category’s fortunes in the US market,” he says, “thereby increasing availability. There may have been allocation issues had the spike in India come a year or two earlier. However, local agave-based drinks of comparable quality to imported tequilas – and at similar price points – provide competition that, given Indian consumers’ evident pride in the increasing quality of local products, may become more of a factor.”
Another market to watch is Colombia, which is expected to register CAGR volume growth of almost 5% to 2030 following a period of rapid expansion, including a 26% volume gain in 2024-25. “The category is experiencing a surge in popularity and trendiness, reflected in robust growth,” says IWSR market analyst Jessica Ibarra. “Volumes have doubled since the pre-pandemic levels of 2019.”
Other markets worth noting include Nigeria (2019-25 volume CAGR of 48%), Türkiye (+19%, and forecast CAGR of 8% to 2030) and Japan (+12%, plus forecast CAGR of 7% to 2030).
Tequila’s structural tensions
Beyond these general market trends, the category’s future is also being shaped by two counterforces: the agave supply cycle and consumer behaviour.
After a period of elevated pricing for agave, over-planting during the 2015-22 boom years is set to create a supply glut within the forecast window to 2030, resulting in reduced costs. This has already manifested itself in Mexico, and could help support the global expansion of accessible premium products.
“The agave supply cycle suggests that raw material costs could ease meaningfully within three to five years as current over-planting becomes ready to harvest,” explains Hermoso. “Producers who can sustain margin discipline through this period will benefit from a more favourable input cost environment.”
At the same time, however, there are clear signs that consumer behaviour is more value-sensitive than brand positioning might suggest. This is reflected by the hard price ceilings seen in the US, while India’s surge in ultra-premium volumes is from a tiny base against a backdrop of availability-dependent growth.
Opportunity and challenge
“The centre of gravity is not shifting away from the US, but the category’s growth story increasingly depends on what happens outside it,” concludes Hermoso. “Promising markets outside the US and Mexico – India, West Africa, Türkiye, Colombia and Japan – are at very different stages of development.
“In the months and years ahead, that creates both an opportunity and a sequencing challenge for brand owners.”
The above analysis reflects data from IWSR’s 2026 data release. For more in-depth data and current analysis, head here to request a callback from IWSR.
