Whether or not at a bar, restaurant, or grocery retailer, Tito’s Handmade Vodka is at all times more likely to be on the shelf. The model has grown into one of many best-selling vodkas within the U.S., however even market leaders aren’t proof against shifting client preferences and financial uncertainty.
With alcohol gross sales hitting multi-year lows, Tito’s Vodka has made an sudden transfer to safe its future by getting into the tequila enterprise for the primary time.
Tito’s Vodka has acquired a majority stake in Lalo Tequila, marking its first-ever model acquisition and increasing its portfolio past vodka.
The monetary phrases of the deal weren’t disclosed, however Tito’s Vodka plans to supply strategic gross sales help and increase distribution, whereas Lalo Tequila’s co-founder, Eduardo “Lalo” González, will proceed overseeing manufacturing.
“At Tito’s, we’ve always said if you’re going to do something, do it well,” mentioned Tito’s Handmade Vodka Founder Tito Beveridge in a press launch. “I’ve known the Lalo founders for a long time. They care about the juice. They keep it simple. They do things the right way, not the flashy way. That felt like home to us.”
Based in 2020 by the grandson of Don Julio González, the creator of Don Julio Tequila, Lalo Tequila has rapidly turn out to be one of many fastest-growing tequila manufacturers within the U.S.
Recognized for its crafted blanco tequila made with agave from Jalisco, Mexico, the model makes use of conventional strategies and has been Mexican-owned since its inception.
Tito’s Vodka acquires Lalo Tequila amid an alcoholic beverage trade hunch.
Picture supply: Shutterstock
The alcohol trade faces headwinds
This transfer from Tito’s Vodka comes because the alcohol trade faces persistent slowing gross sales. After peaking throughout the Covid pandemic, consumption has fallen amid inflation, financial uncertainty, and new tariffs.
In line with NielsenIQ, complete alcohol gross sales declined 3% within the first half of 2025, with spirits, excluding ready-to-drink drinks, down 2.8% in worth and three.2% in quantity. Nevertheless, tequila continues to drive progress within the alcoholic beverage class.
Associated: Coors beer drops new enterprise as alcohol gross sales decline
Tito’s Vodka is proof of those headwinds. The corporate generated $2.6 billion in gross sales in 2024, however noticed a 1.5% decline in quantity, falling from 12.18 million in 2023 to 12 million circumstances, in accordance with Market Watch.
“Ongoing economic challenges are likely to maintain pressure on consumer spending and market dynamics,” mentioned IWSR Client Analysis COO Richard Halstead in a report. “As economic constraints have taken effect, IWSR’s Bevtrac consumer research shows that consumers have diverted spending from alcohol to household essentials – fuelling a marked decline in per capita alcohol consumption, which fell below pre-pandemic levels.”
Alcoholic beverage rivals shift methods
Tito’s Vodka is not the one alcohol firm adapting to trade slowdowns. Rivals are formulating new methods by restructuring portfolios and venturing past alcohol to spice up progress.
Constellation Manufacturers (STZ) bought its Svedka vodka model to Sazerac in late 2024, distancing itself from lower-priced choices to concentrate on premium manufacturers.
Nevertheless, outcomes stay weak. The corporate reported a complete gross sales decline of 6% year-over-year within the first quarter of fiscal 2026, with wine and spirits down 28%.
LVMH, greatest recognized for its luxurious wine and spirits, has endured steady gross sales drops since 2023. To diversify, it made a minority funding within the high-end nonalcoholic winemaker French Bloom, marking the corporate’s first-ever entry into the sober market.
Nonetheless, the corporate’s wine and spirits income dropped 8% within the first half of fiscal 2025.
Different main gamers, reminiscent of Molson Coors and Diageo, are additionally betting on nonalcoholic drinks. In line with IWSR, the worth of nonalcoholic spirits is predicted to extend by 18% yearly by way of 2028, reaching $5 billion.
Associated: Tariffs will value the liquor trade over $2 billion in gross sales
