Jose Cuervo Maker Warns of Tough Year Ahead as US Sales Drop

Becle, the world's biggest tequila producer behind Jose Cuervo, is bracing for a challenging 2026 due to distribution changes and declining demand for spirits in the US. The Mexican company ended its partnership with a major US distributor and expects sales to drop as Americans drink less alcohol overall.

The world’s top tequila producer is preparing for a bumpy road ahead as American consumers cut back on hard liquor purchases and the company overhauls how it gets its products to store shelves.

Becle, the Mexican company behind Jose Cuervo and other popular tequila brands, announced it expects a challenging 2026 after ending its distribution partnership with Republic National Distributing Company this month. The split comes as the distributor made a messy departure from California, the nation’s largest state, at the end of last year.

Company executives are now rushing to establish new distribution partnerships while dealing with shrinking demand across their primary North American markets.

“This will be a transition year,” Chief Financial Officer Rodrigo de la Maza explained to industry analysts. “Changes of this scale take time to fully stabilize and may create temporary disruptions, shipping volatility, inventory realignment and added complexity.”

The company anticipates the most significant challenges will occur during the first six months of 2026, with executives hoping to see US market growth resume by 2027.

Becle projects its sales revenue will fall by low single digits in 2026 when accounting for currency fluctuations, while spending between $90 million and $110 million, a decrease from the $130 million budgeted for 2025.

Declining sales throughout Becle’s key North American territories caused revenues to plummet 14% during the final quarter of 2025, which also hurt net profits alongside increased tax obligations.

The disappointing financial results fell short of analyst expectations, causing Becle’s stock price to drop as much as 5% during morning trading before recovering slightly. Shares remain down 16% since the start of the year.

Scotiabank analyst Felipe Ucros described the recent quarter as one “to forget by most measures,” noting that “the start of 2026 doesn’t look too bright either” due to a stagnant tequila market as American drinking preferences shift.

Industry experts blame the downturn on several factors including tighter household budgets, growing interest in healthier lifestyle choices, and competition from legal marijuana sales. Becle has also noted that Canadian consumers are increasingly choosing locally-produced spirits following last year’s trade tariff concerns.

While tequila enjoys exemption from US tariffs under the North American trade agreement currently under review, ongoing trade tensions have still impacted the industry, especially smaller suppliers.

US tequila imports dropped 26% during the first nine months of 2025 compared to the same timeframe in 2024, according to trade association figures, while overall spirits imports declined 17%. Becle’s combined US and Canadian sales fell 4% throughout 2025.

Although sales grew in markets outside North America, which typically generate about one-fifth of the company’s revenue, the gains weren’t sufficient to balance losses in larger markets. A stronger peso also reduced the value of foreign currency earnings.

Despite lower sales volumes last year, Becle managed to improve profit margins by avoiding the aggressive price cuts adopted by competitors.

De la Maza told analysts that while the spirits industry remains weak, Becle continues to outperform the broader market and should benefit from reduced agave costs, though less dramatically than in 2025. Agave is the spiky plant essential for tequila production.

When asked about recent violence in Jalisco state, tequila’s birthplace, following the military killing of Mexico’s most wanted cartel leader, Becle stated its operations remained unaffected and the company doesn’t anticipate any operational challenges.