The Sobering Shift: Why Alcohol Consumption Is Declining and What It Means for Brands

Its Patio Season, What in Your Glass?

I went out for dinner last night for one of my first “patio out” events of summer 2025 and noted how many fellow diners were sipping non-alcoholic beverages.   This inspired today’s post.

A Market Losing Its Buzz 

Alcohol sales are declining rapidly. Global industry leaders like Diageo and Brown-Forman have experienced stock price drops of over 50%. Constellation Brands recently reported a $2.8 billion write-down on its wine and spirits division, citing ongoing demand softness. In the U.S., alcohol consumption has fallen to its lowest level since 1962, with a 3% decline in 2024 alone and a 10% decrease from the pandemic-era peak. 

In Canada, the situation mirrors this: British Columbia reported a 20-year low in pure alcohol purchases in 2023. For an industry long viewed as recession-proof, this is more than a blip; it's a transformation. 

Why Consumers Are Drinking Less 

A growing body of evidence suggests this isn’t merely a temporary dip; it's a generational reset. Several overlapping forces are reshaping drinking culture, particularly among Millennials and Gen Z: 

• Health and wellness consciousness: More consumers are aware of the links between alcohol and cancer, liver disease, and mental health issues. 

• Sober-curious lifestyle: Gen Z is increasingly likely to forgo alcohol entirely, citing enhanced mental clarity and the ability to connect socially without drinks. 

• Pandemic behavior shifts: Many who drank less or stopped entirely during lockdowns never returned. 

• Financial pressure: As inflation has impacted essential goods, many consumers are reducing discretionary spending on items like alcohol. 

The Rise of the Non-Alcoholic Boom 

As alcohol consumption decreases, non-alcoholic alternatives are surging. This isn't just a fringe trend; it's reshaping store shelves. 

• Non-alcoholic beer has now become the second-largest beer category in the world, growing at a rate of 22% each year since 2019. 

• Brands such as Heineken and Guinness have made significant investments in their “0.0” versions of flagship products. 

• Startups and retailers are promoting sophisticated booze-free options—from botanical spirits to adaptogenic “social tonics.” 

Consumers aren’t just drinking less; they’re seeking products that support rituals without regret. 

Policy and Price Are Accelerating the Shift 

Cultural trends aren’t the only forces at play. The regulatory and economic environment is also pushing consumers away from alcohol: 

• Tighter regulations: Health advocates and governments are advocating for stricter alcohol labeling, similar to tobacco. 

• Rising costs: Due to inflation, “sin” taxes, and retailer markups, alcohol is pricier than ever. 

• Cannabis competition: In areas where cannabis is legal, some consumers are opting for edibles or vapes instead of alcohol. 

Together, these factors are transforming the decline into a multi-pronged shift in both behaviour and access. 

What This Means for Brands and Retailers 

For brands in the alcohol industry, the implications are serious, yet not dire. In fact, this shift offers an opportunity to innovate and diversify. 

For alcohol producers: 

·       Invest in premium experiences such as small batch runs. Occasional drinking is still valued, particularly if it’s high-quality or artisanal. 

·       Expand non-alcoholic product lines to satisfy evolving consumer expectations. 

·       Redirect messaging from escapism to connection, authenticity, and wellness. 

For retailers: 

·       Allocate more shelf space for NOLO (no and low alcohol) options. 

·       Leaning into in-store discovery, education, sampling, and curation can drive the trial of unfamiliar products. 

·       Consider the “alcohol aisle” as a more inclusive social beverage section. 

Bigger Picture: A Cultural Rewriting of Celebration 

What does it signify when alcohol is no longer the default in moments of joy, stress, or connection? We’re witnessing a generational rewrite of what socializing, relaxing, and celebrating entail. 

Instead of mourning the decline, brands and businesses have the opportunity to shape what comes next. While alcohol may be losing ground, culture isn’t losing its appetite for meaning, ritual, and flavour. Those who grasp the new playbook will be the ones to succeed.