Industry Overview - Spirits sales in the US experienced a decline in both value and volume in January, with total sales value dropping 3.7% to $917.3 million and volumes decreasing 2.1% to 4.3 million nine-litre cases [1] - Over the twelve months leading to January, the spirits sales value in the US fell by 3.1% to $13.2 billion [1] Volume Trends - Total spirits volumes decreased by 1.6% to 60.3 million nine-litre cases, attributed to fewer selling days in Michigan, the second-largest spirits control state [2] - Cocktails saw the largest volume growth in January, increasing by 26.1% to 301,054 nine-litre cases, driven by canned ready-to-drink products [2] - Cachaça experienced a modest growth of 1.2% to 543 nine-litre cases, although its twelve-month volume dropped by 5.5% to 8,967 nine-litre cases [2] Tequila Performance - Tequila volumes rose by 2.1% in January to 479,555 nine-litre cases, but sales value decreased by 2.6% to $161.5 million [3] - For the twelve months ending in January, Tequila sales volumes increased by 1.9%, while value slightly dipped by 0.4% to $2.51 billion [3] - The volume growth of Tequila is noted to be in the context of a 2.3% decline in price mix, which is the weakest performance among all categories [3] Company Insights - Diageo reported facing a challenging trading environment for Tequila in the US, which negatively impacted organic sales in North America [4] - The decline in organic sales was primarily driven by Don Julio, Casamigos, and Crown Royal, with tough comparatives and increased competition affecting results [4] - Tequila sales for Diageo in the first half of its 2026 fiscal year fell by 23%, with Don Julio and Casamigos experiencing declines of 20.9% and 30.9% respectively, due to increased competition and reduced distributor inventories [5] - Ongoing litigation and media coverage regarding additives and adulteration in Tequila have further impacted consumer sentiment negatively [5] - Diageo indicated readiness to review its pricing and product strategies in response to muted consumer confidence in key markets, particularly the US [6]