Is Gen-Z Really Drinking Less ? - This is What The Data Suggests..
What Morgan Stanley and IWSR Reveal About Gen Z’s Changing Drinking Habits
A Decade in Reverse
What the data really says about alcohol’s future
Before we ask why Gen Z drinks the way it does, we need to acknowledge something bigger:
The entire alcohol category is facing a generational shift.
A recent report by Morgan Stanley paints a clear picture: Alcohol consumption it’s structurally changing.
Gen Z drinks 30% less than Millennials did at the same age.
In the U.S, the average drinks per week among 18–34-year-olds has dropped from 5.2 to 3.6 over the last two decades.
Spirits sales fell by 8% in just four weeks, while beer volumes are down 5.3% year-on-year.
These declines aren’t isolated to younger consumers.
Even the 35–54 age group—once the dependable backbone of the industry—is now flat after twenty years of steady growth.
Pricing power is fading, too. In May, beer prices rose just 0.6%, the lowest increase since early 2021. Meanwhile, alcohol stocks like Brown-Forman and Boston Beer are trading at 30% below their yearly highs.
Contrast that with the rise of functional and non-alcoholic beverages:
Zero-calorie sodas and clean-label drinks are gaining traction across demographics.
Coke Zero and Monster Energy continue to grow, holding volume in more than 78% of reported quarters.
In Western Europe, no- and low-alcohol beer now accounts for over 5% of market share.
The numbers suggest something bigger than a generational quirk.
We’re witnessing the early days of a post-alcohol era, one defined by clarity, function, and control.
For brands and bartenders, the takeaway is clear:
Understanding Gen Z isn’t just a trend.
It’s a map to the future of drinking.
Morgan Stanley, "Beverage Industry – Global Alcohol Trends"
The Generation That Changed the Narrative
In recent months, Gen-Z has often been called the 'sober generation' due to ‘apparent’ early reports of declining alcohol consumption.
However this narrative misses the deeper truth.
The reality is not abstinence but transformation. Gen Z’s drinking habits actually reveal a generation that drinks with intention, valuing quality over quantity, experience over excess, and control over chaos.
Probably this shift is not narrating the entire truth, and is not showing a sudden rebellion but a natural evolution influenced by global events, economic pressures, and cultural changes.
What seemed like a sharp decline in youth drinking was in fact a recalibration.
Moderation, Not Abstinence
Gen Z’s relationship with alcohol isn’t about rejection—it’s about better choices. According to the latest Bevtrac survey from IWSR, the idea that Gen Z drinks significantly less than older generations just doesn’t hold up anymore.
Across 15 major markets, the percentage of legal-age Gen Z consumers who’ve had alcohol in the last six months jumped from 66% in March 2023 to 73% in March 2025. The increase is even more striking in some places:
From 46% to 70% in the U.S.
66% to 76% in the U.K. and 61% to 83% in Australia.
Richard Halstead, IWSR’s COO of Consumer Insights, puts it plainly:
Moderation is a trend shared by all drinkers, not a Gen Z specialty. He points out that alcohol consumption is closely tied to disposable income. Given that Gen Z entered adulthood during a cost-of-living crisis, it’s no surprise their drinking patterns initially dipped. Bars and restaurants—key social hubs for younger drinkers—have also seen steeper price hikes.
But as more Gen-Zers join the workforce and incomes rise, their drinking frequency is expected to follow the path Millennials took—picking up again with financial stability.
The takeaway?
The supposed recent drop in consumption isn’t a permanent shift or a “Gen Z problem.” , And in all honesty, it isn’t really a drop.
In fact:
“Alcohol usage among Gen Z adults has increased significantly from April 2023 lows, and there is evidence that the propensity to go out and spend more is recovering among this group – challenging the received wisdom that this generation is ‘abandoning’ alcohol,” says Richard Halstead, COO Consumer Insights.
Source: IWSR Bevtrac Survey
Final Sip
Gen Z’s drinking behavior is not about rejection; it’s about refinement.
This intentional approach prioritizes quality, story, and experience over sheer volume.
The narrative has shifted. Gen Z isn’t killing alcohol. They’re curating it. The future of the beverage industry will be defined not by how much people drink, but by how meaningful their drinking experiences are.