Summary of a report by Morning Consultant – February 2025

The culture of drinking in the U.S. is undergoing a significant transformation. While the adult beverage category has expanded with an explosion of global influences and innovative products and flavor profiles, fewer Americans are consuming alcohol overall. At the same time, the low- and non-alcoholic beverage market is experiencing rapid growth, driven by consumers, particularly younger generations, seeking less-boozy alternatives.

Fewer Americans are drinking alcohol: The share of adults who say they drink has been declining, driven by various factors from health concerns to societal shifts and lifestyle considerations.

Drinking is inherently social: Drinkers most often consume with others and tend to choose their beverages based on specific occasions.

The beer industry has a Gen Z problem: While beer has traditionally appealed to younger drinkers, Gen Zers are eschewing it in favor of other options like hard seltzers.

Sober and damp lifestyles continue to gain popularity: Drinkers and non-drinkers alike are embracing non- and low-alcohol alternatives.

Declines in alcohol spending are primarily driven by millennials, who generally spend the most on booze compared to other generations.

This downward shift in alcohol spending appears to be widespread amongst the youngest generation – a smaller share of millennials are buying alcohol in stores and online, as well as going out to bars less frequently.

Overall, it isn’t clear what exactly is causing this pullback in alcohol spending from millennials. According to Morning Consult Intelligence’s audience data, millennials are more likely to use Ozempic than the other generations, and one of its side effects is a reduction in drinking. As recreational marijuana becomes legal in more states across the country, some millennials may be trading in booze for THC. Younger millennials are entering their 30s and could be opting out of drinking as they start their own families. No matter the reason, a clear trend has emerged in the last six months, as millennials, once the leader in alcohol spending, have moderated substantially in 2024.

For Theatres with Alcohol Offerings
While relaxation is the most popular reason for drinking alcohol across all generations, Gen Z stands out, drinking alcohol far less as a refreshment or a way to elevate meals. Alcohol is, therefore, an occasional treat for the younger generation, whereas older consumers consider it a regular, relaxing refreshment. 

Regarding fizzy drinks, Gen Z consumers reported a lower intake of carbonated soft drinks at bars and pubs than Millennials. Notably, Gen Zers agreed above average that fruit juices with sophisticated flavors are a better alternative to alcoholic beverages than regular fruit juices.

This indicated that upgraded fruit juice may be a good alternative for young people. Finally, Gen Z consumers drink energy drinks on a night out more than twice as much as older groups. This heightened consumption could be attributed to the energy boost provided by energy and sports drinks, which have a similar effect to drinking alcohol.

The trend away from drinking alcohol among young people will continue to grow. Still, it may not expand into older generations – who appear to be more consistent in their alcohol consumption levels.