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While beer looked better in Q1, at least in some light, spirits looked considerably worse. One after another, major distillers reported rough US results early in 2026. And tho inventory adjustments and tough comps (often against tariff-related load-ups) hit shipments hard, underlying depletions trends remained soft. Indeed, total spirits depletions declined 5.6% Jan-Mar, with distrib revs off 7%, SipSource reported. For 4 mos, spirits $$ down almost 2% in NIQ off-premise data, but down more like 5% ex-RTDs, volume a pt better. Diageo Spirits US Sales Dropped 15%, Depletions Down 10% in Q1 Start at the top. Largest global distiller posted better-than-feared global results for its fiscal Q3, Jan-Mar, but the US weighed heavy. Organic net sales trend here fell 15.4%, about 5 pts softer than underlying STR trends, co reported. And price/mix is also a drag these days, co pointed out. SipSource data suggests gap between $$ and volume is widest for tequila. And Diageo's tequila volume dropped double digits in Q1, it reported. "North America remains our biggest challenge, where market conditions are soft and our offer needs to be more competitive," ceo "Drastic" Dave Lewis commented on call, promising details about a bigger repositioning of its US spirits strategy in Aug. Ironically, co's US beer biz is humming, with Diageo Beer Co USA net sales up a strong 9% Jan-Mar.US Sales Tripped 12% for Pernod Ricard, Lagging 4% Core Spirits Volume Drop by 2 Pts Pernod Ricard didn't do a whole lot better, reporting US organic net sales off 12% Jan-Mar, now down 14% for 9 mos. Like Diageo, co's global results were better (flattish) and depletions here weren't so soft, hit by shifts in inventory and tariff timing. Pernod estimated US bottled spirits volume dipped about 4% for the qtr, which it trailed by 2 pts, again pointing to soft price/mix. It echoed another common refrain that on-premise outperformed off-premise, born out in SipSource STRs, where on-prem volume dipped 2%, off-prem by 6%.Deals with Brown-Forman Fall Off Ahead of Full Yr Results; Sazerac One of Few Retail Gainers Pernod reported its qtr just ahead of confirmation that co's talks about a possible takeover or merger with major US whiskey-maker Brown-Forman fell thru. And that news was followed by reports that the Brown family rejected the $15-bil bid made by Sazerac. B-F reported its fiscal Q3 back in Mar, including global net sales better for 3 mos but still down 2% for 9 mos, with US -1% organically fiscal YTD. Yet Sazerac, a private co, continued to outperform in NIQ scan data, $$ up 3% thru May, same as Fifth Generation (Tito's) and a bit faster than Heaven Hill's 1% uptick. Most other major distillers soft or very soft in this data, with Suntory, Pernod Ricard, B-F, Proximo (Cuervo), Moet Hennessy, William Grant and Remy Cointreau all down 5-8%. Diageo declined 10%.Proximo US Shipments -24%, $$ -37% Amid Distrib Transition; Remy Did Better Few distillers faced bigger headwinds than Jose Cuervo maker Proximo. Its distrib shifts and ongoing inventory reductions in the US contributed to big global shipments declines of over 13%, compounded by negative currency pressure. So US and Canada volume down a combined 24% in the 1st qtr, with same peso/dollar interplay helping push net sales down a massive 37%. Again, depletions better, but still down 9%, driven by 12% drop in mkts where co is in midst of changing its distribution, -5% in "non-transition markets," co reported.On flipside, Remy Cointreau looked much more solid, US organic net sales up a bit in co's fiscal Q4, tho the value of its STRs fell mid single digits for the qtr and YTD with volume off low single digits. Co's liqueurs and core spirits outperformed cognac, tho it saw negative price mix across the board. With lots of puts and takes, one-off impacts, major distribution shake-ups and persistent macroeconomic uncertainty, midway thru Q2 it remains tough to parse whether these short term trends are just that or whether they're the beginning of a longer term decline.

Parade of Horrible US Spirits Trends March into Q2 Seeking a Reset, Strategy Shift; STRs -6% for 3 Mos

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