Whether at a bar, restaurant, or grocery store, Tito’s Handmade Vodka is always likely to be on the shelf. The brand has grown into one of the best-selling vodkas in the U.S., but even market leaders aren’t immune to shifting consumer preferences and economic uncertainty.
With alcohol sales hitting multi-year lows, Tito’s Vodka has made an unexpected move to secure its future by entering the tequila business for the first time.
Tito’s Vodka has acquired a majority stake in Lalo Tequila, marking its first-ever brand acquisition and expanding its portfolio beyond vodka.
The financial terms of the deal weren’t disclosed, but Tito’s Vodka plans to provide strategic sales support and expand distribution, while Lalo Tequila’s co-founder, Eduardo “Lalo” González, will continue overseeing production.
“At Tito’s, we’ve always said if you’re going to do something, do it well,” said Tito’s Handmade Vodka Founder Tito Beveridge in a press release. “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.”
Founded in 2020 by the grandson of Don Julio González, the creator of Don Julio Tequila, Lalo Tequila has quickly become one of the fastest-growing tequila brands in the U.S.
Known for its crafted blanco tequila made with agave from Jalisco, Mexico, the brand uses traditional methods and has been Mexican-owned since its inception.
Image source: Shutterstock
The alcohol industry faces headwinds
This move from Tito’s Vodka comes as the alcohol industry faces persistent slowing sales. After peaking during the Covid pandemic, consumption has fallen amid inflation, economic uncertainty, and new tariffs.
According to NielsenIQ, total alcohol sales declined 3% in the first half of 2025, with spirits, excluding ready-to-drink beverages, down 2.8% in value and 3.2% in volume. However, tequila continues to drive growth in the alcoholic beverage category.
Related: Coors beer drops new business as alcohol sales decline
Tito’s Vodka is proof of these headwinds. The company generated $2.6 billion in sales in 2024, but saw a 1.5% decline in volume, falling from 12.18 million in 2023 to 12 million cases, according to Market Watch.
“Ongoing economic challenges are likely to maintain pressure on consumer spending and market dynamics,” said IWSR Consumer Research 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 competitors shift strategies
Tito’s Vodka isn’t the only alcohol company adapting to industry slowdowns. Competitors are formulating new strategies by restructuring portfolios and venturing beyond alcohol to boost growth.
Constellation Brands (STZ) sold its Svedka vodka brand to Sazerac in late 2024, distancing itself from lower-priced offerings to focus on premium brands.
However, results remain weak. The company reported a total sales decline of 6% year-over-year in the first quarter of fiscal 2026, with wine and spirits down 28%.
LVMH, best known for its luxury wine and spirits, has endured continuous sales drops since 2023. To diversify, it made a minority investment in the high-end nonalcoholic winemaker French Bloom, marking the company’s first-ever entry into the sober market.
Still, the company’s wine and spirits revenue dropped 8% in the first half of fiscal 2025.
Other major players, such as Molson Coors and Diageo, are also betting on nonalcoholic beverages. According to IWSR, the value of nonalcoholic spirits is expected to increase by 18% annually through 2028, reaching $5 billion.
Related: Tariffs will cost the liquor industry over $2 billion in sales
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