Summary of global alcohol decline drivers
- Global alcohol consumption is declining due to affordability and lifestyle changes
- Gen Z drinking levels have normalised and no longer drive decline
- Economic pressures and shifting habits place industry in prolonged downward trajectory
- GLP-1 weight loss drugs may significantly reduce alcohol consumption globally
- Analysts warn combined forces create persistent negative outlook for alcohol
The conventional wisdom has been for some time that Gen Z is driving the decline in alcohol consumption.
The alcohol sector is facing a number of challenges. Volume has been falling globally for some time, with many consumers opting to cut down or stop completely. Key drivers include lifestyle factors and affordability.
Nevertheless, the reasons for decline go beyond one generation. The fall in alcohol consumption has more nuanced causes.
The state of the alcohol industry
The alcohol industry is in “suspended animation”, says Spiros Malandrakis, head of research for alcoholic drinks at Euromonitor. It’s “not collapsing”, but it’s “in a very long downward spiral”.
Part of this is due to economic pressures, he says, creating a “potent, potentially toxic macroeconomic mix” which can push down sales. He does not see this changing in the foreseeable future.
What the industry is asking itself is whether this decline is also “structural” – whether it’s linked to a “paradigm shift” in the way people consume alcohol, shifting towards healthier lifestyles and towards sober curiosity.
Some consumers are shifting from alcohol to cannabis as an alternative, particularly in the US where it is legal in many states.
These lifestyle shifts are not specific to a single demographic, Malandrakis stresses – they’re relevant across the board.
Gen Z not alone in driving alcohol decline
Gen Z is not the biggest driver in alcohol’s decline, according to beverage alcohol data and insights company IWSR.
“Gen Z participation in beverage alcohol consumption was below that of other generational cohorts, but has now mostly normalised and become indistinguishable from other generations,” said a spokesperson for the company.
Younger people were the “pioneers” in the trend of moving away from alcohol consumption, says Euromonitor’s Malandrakis. However, they are no longer its main drivers.
“I don’t think the sober curiosity trend is something that is distinctly only related to younger demographics anymore”.
Younger consumers, especially Gen Z, were initially leading the ‘sober curiosity’ trend because of financial constraints, according to Malandrakis. Many younger consumers refrained from drinking to save money, he suggests, and generally had less of it than their elders.
Now, more of Gen Z is drinking than before. Data from IWSR suggests that the proportion of legal drinking age adults in Gen Z who have consumed alcohol in the past six months went from 66% in March 2023 to 73% in March 2025.
GLP-1s: The ‘iceberg on the horizon’
One factor that has the potential to make a far greater impact in future is the popularity of GLP-1s. The “iceberg on the horizon” for the alcohol industry, GLP-1 weight-loss drugs could have the potential to lead to consumers cutting down significantly, suggests Malandrakis.
Research from Morgan Stanley, for example, suggests that GLP-1s can reduce alcohol consumption by as much as 75%, and 50% per occasion.
Once the medications become generic, they will become far more accessible. This has the potential to impact the alcohol industry quite significantly.
Malandrakis does stress that it’s difficult to measure the exact effect of GLP-1s on the alcohol market, as for this, a link needs to be established. Research on the topic is often done through self-reporting by consumers, which isn’t always reliable.
The future of alcohol
The combination of the above factors doesn’t bode well for the alcohol sector.
The “culmination of all these factors, this kind of perfectly explosive cocktail that is coming together all at exactly the same time . . . creates this negative narrative that I don’t expect to change”, says Euromonitor’s Malandrakis.
Declines globally have been small but clear. According to IWSR, the compound annual growth rate (CAGR) of alcohol by volume between 2019 and 2024 was -1%. This reached -3% in China, -2% in Germany, Japan, and the UK, and -1% in the US.
However, consumer behaviours associated with ‘indulgence’, including drinking, could increase in the future, he predicts. This may be in the form of what he describes as ‘nihilistic indulgence’. In times of crisis, Malandrakis points out, consumers often drink or smoke more. Many believe we are living in an era of ‘perma-crisis’, which may precipitate more such behaviours down the line.
If consumers begin to think there is no future for them, they are more likely to do this.
Of course, alcohol consumption has been around for thousands of years. It is unlikely to just disappear. But now, things don’t look good for the sector.
