Recent data indicates a significant moderation trend in alcohol consumption, with IWSR forecasting a 6% compound annual growth rate for no- and low-alcohol volumes from 2023 to 2027 across the top 10 markets. This trend is driven by health and lifestyle choices, particularly among legal-drinking-aged Gen Z and Millennials, who show higher rates of moderation (75% and 70% respectively) compared to Gen X (60%) and Boomers (54%). However, the moderation sentiment is not exclusive to younger demographics, as high costs of living and lower disposable incomes are forcing consumers of all ages to re-evaluate their alcohol spending, leading to "economic moderation" becoming the primary driver in 11 out of 15 key beverage alcohol markets.
Despite the overall moderation trend, there's a surprising counter-movement among Baby Boomers. While younger generations like Gen Z are spending 15% less on alcohol in January compared to two years ago and Millennials' bar spending remains negative year-over-year, Baby Boomers are actually increasing their bar spending. According to Bank of America Institute data, spending at bars among Baby Boomers was up 4% year-over-year in January 2025, outpacing all other generations. This suggests that as Boomers approach or enter retirement, they are enjoying more leisure time and spending their savings on social activities, including drinks at bars.
Younger consumers, particularly Gen Z, are more likely to adopt money-saving strategies for alcohol purchases, such as buying on promotion, changing retailers, or opting for cheaper online options. They also show a preference for soft drinks as alternatives to alcohol, while Millennials lean towards low-alcohol options. Boomers, on the other hand, frequently choose water as their moderation strategy but are still increasing their overall spending at bars. This generational divergence in drinking habits and spending patterns presents a complex landscape for the beverage alcohol industry, which is grappling with significant changes, including over $1 billion in lost U.S. wine revenue last year due to younger consumers cutting back.
