Insights
Sep 1, 2026
Has the party ended? The demand migration reshaping beverage alcohol
For most of modern history, beverage alcohol has been one of the most reliably durable categories in the global economy. Embedded in social ritual across every culture, every generation, and nearly every special occasion, it has weathered wars, recessions, Prohibition in America, and shifting consumer tastes while continuing to grow. The idea that beer, wine, and spirits could face something more serious than a temporary headwind has been almost unthinkable.
Since 2022, global beverage alcohol companies have lost roughly $830 billion in market value. Constellation Brands stock is down nearly 14% over the past year. The Kentucky bourbon industry, one of America's great consumer growth stories of the past two decades, is in what insiders now call a full bust cycle. Wine, particularly California wine, faces structural oversupply with no obvious near-term correction.
The industry's instinct has been to read all of this as a cycle of cost cutting and waiting for recovery. But cutting is a response to a cyclical problem. If this is structural (evidence increasingly suggests it might be) the path forward is about understanding what is changing and growing.
The distinction matters because the strategies required to navigate each are fundamentally different. Companies that recognize the structural nature of the shift and move deliberately to understand where demand is going will position themselves for the next era of growth.
The numbers tell a story worth taking seriously
On the surface, the volume declines look modest. Global beverage alcohol volumes fell approximately 1% in both 2023 and 2024, with 2025 continuing that trend. But consider what those numbers represent at category scale, where even fractional shifts translate into billions of dollars of lost revenue, stranded inventory, and impaired asset values. The $830 billion in market cap destruction is the real unit of measure here.
Wine has suffered the sharpest erosion, down 6% in U.S. volume in 2025, with IWSR describing it as being in structural rather than cyclical decline. Spirits volumes fell 1.3% globally. The World Health Organization estimates total global alcohol consumption fell 12% between 2010 and 2022 – a trend that predates COVID, and shows no sign of reversing.
The consumer participation data may be the most telling signal. U.S. adults who drink alcohol fell to 54% in 2025, an 8% decline in two years. Nearly half of U.S. consumers surveyed in late 2024 said they were actively trying to reduce their drinking in the coming year, up from 41% in 2023 and 34% in 2022.
According to Attest's 2026 survey of U.S. Gen Z consumers, 24% report not drinking at all (up from 17% the previous year) and daily drinking has dropped from 6% to 2%. This isn’t a phase. It’s a generational reframing of alcohol’s role in everyday life.
Alcohol’s demand migration
Consumers still want to unwind, connect, celebrate, and experience pleasure. Social belonging, relaxation and self-expression are as powerful as ever. What is changing is where and how consumers are fulfilling this. For many companies in this industry, that migration is still misunderstood.
Some directional signals are clear. Non-alcoholic beverages are growing rapidly, with NA beer volumes rising 9% globally in 2024 and the U.S. market growing at a 23% CAGR between 2019 and 2024. Ready-to-drink formats continue to gain share, making them the only traditional alcohol segment posting consistent volume and value gains globally in 2025. Within the category, premiumization is holding at the top end while the mainstream middle erodes sharply.
But the fuller picture is more complex. THC and cannabis beverages are competing directly for relaxation and social occasions. And as we explored in a recent article, GLP-1 medications are emerging as a quietly significant wildcard: research indicates that GLP-1 receptor agonists meaningfully reduce alcohol cravings and consumption.
Companies now need to figure out which demand spaces are capturing which consumers, across which occasions, and at what pace.
Who is reading the signal?
The divergence in performance across the industry reflects very different readings of what is happening.
AB InBev has invested ahead of the migration more deliberately than most. Its no-alcohol beer portfolio grew revenue 27% in Q1 2026, and its Beyond Beer platform (including RTDs and canned cocktails) grew 37% over the same period, helping the company break a three-year streak of volume declines. Pernod Ricard shed more than 10 million cases of wine in 2025, including Jacob’s Creek and Campo Viejo, to focus on premium spirits and no-low alternatives.
The companies navigating this most effectively are still defending their core business while actively investing in new spaces where consumer demand is migrating.
The growth opportunity inside the reset
Embedded in this structural shift is one of the more compelling growth opportunities the beverage industry has seen in decades.
The clearest precedent may be carbonated soft drinks. CSD volumes peaked around 2004 and declined for more than a decade. The companies that fared best didn't try to reverse the tide in cola. They followed demand as it migrated toward functional hydration and sports performance, making moves like Pepsi’s acquisition of Gatorade in 2001 look prescient in hindsight. The companies that kept defending the old category at the expense of the new opportunity paid for it in share price and relevance.
Beverage alcohol is at a structurally similar moment. The underlying consumer needs haven’t weakened. What is up for grabs is which brands, formats, and occasions will fulfill those needs for the next generation.
The companies that will define this industry's next chapter are those willing to do the hard work now: mapping where profitable demand is moving, identifying which occasions and need states represent the highest-confidence growth spaces, and committing portfolio, innovation, and go-to-market strategies around that future demand. The structural reset in beverage alcohol is not the end of the category. It is a historic inflection point. And for the companies ready to treat it as a strategic brief rather than a waiting game, it is the beginning of something new.
About the Authors
Bryan Radtke is a Managing Consultant at PA Consulting, specializing in growth strategy for consumer and brand-led businesses. A classically trained P&G brand leader with 20+ years of experience, he works with companies on demand-driven growth, market expansion, and new business model development.
Jim Eckels is a Partner at PA Consulting and The Cambridge Group, where he has spent nearly two decades helping clients unlock profitable growth through marketing, innovation, and M&A strategies. Prior to TCG, he held general management and strategy roles at Motorola and Booz-Allen & Hamilton.
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