Demand for distilled spirits in the U.S. market is forecast to rise 1.9 percent annually in volume terms through 2023, according to “Distilled Spirits: United States,” a report recently released by Cleveland-based Freedonia Focus Reports. Suppliers will continue to benefit from a consumer trend toward premium and super-premium distilled spirits, and away from beer and wine. Suppliers also will benefit from increasingly tight consumer budgets, particularly among millennials, as distilled spirits can offer a higher value in terms of drinks on a dollar basis than beer or wine.

Demand for vodka is expected to decline slightly to 2023 while remaining the largest segment because of the spirit’s versatility. Penetration of flavored vodkas has reached a saturation point, which will restrain growth prospects, particularly as suppliers field flavored versions of other spirits.

Tequila demand is expected to rise 5.7 percent a year to 2023, the fastest pace of any segment. Advances will be driven by mounting consumer interest in diversifying their palates and favorable positioning of super-premium tequilas, specifically barrel-aged, as an alternative to whiskey. BI