MW Is booze making a comeback? The sober craze may have run its course.

By Charles Passy

There's evidence to suggest the challenges facing alcohol brands - especially with Gen Z - could be more a temporary blip than a permanent shift in drinking culture

While some younger people are embracing a booze-free lifestyle, others are still more than ready to enjoy drinks in social settings, experts say.

So much for everyone riding that sober wave: The booze industry may actually be poised for a comeback.

In recent years, we've heard plenty about the fact that Americans - especially younger people - are turning away from alcoholic beverages. Think of the rise of booze-free sips and "sober bars," to say nothing of the month-long period of abstention known as Dry January.

This is backed up by surveys pointing to a decline in drinking - and perhaps more tellingly, by data showing a downward trend in U.S. sales volumes for the three major categories of alcoholic beverages. Last year alone, beer sales were down by 1.2%, spirits by 2.7% and wine by 6.6%, according to figures from the Brewers Association and the Wine & Spirits Wholesalers of America, two industry trade groups.

But now, industry professionals and analysts are suggesting the decline may be more a temporary blip than a permanent shift. And while those in the know acknowledge we may never see the return of the three-martini lunch, they also say Americans are not about to embrace the sober lifestyle en masse.

"We believe in the attractive long-term fundamentals of our industry," said Nik Jhangiani, interim chief executive of spirits conglomerate Diageo $(DEO)$.

See also: Corona's parent is looking for more beer drinkers. Why Budweiser could be the buzzkill.

Jhangiani's statement came as the company reported its fiscal-year results this week, in which it reported organic net sales growth of 1.7%. Still, Jhangiani called the year a "challenging" one, pointing to broader economic uncertainty and "the resulting pressure on consumers" as a key factor.

Molson Coors $(TAP)$, the beer-centric company that's another industry powerhouse, also sees encouraging signs in spite of the fact it just reported a sales-volume decline for the recent quarter. The company demonstrated its faith in its ability to rebound through its share repurchases - Molson Coors committed $306.8 million to buy back stock during the first half of this year.

"I want to stress that we continue to view the incremental softness in the industry performance this year as cyclical," Chief Executive Gavin Hattersley said during a post-earnings conference call.

See also: Corona's parent is looking for more beer drinkers. Why Budweiser could be the buzzkill.

There's also Anheuser-Busch InBev $(BUD)$, the world's largest beer maker. It, too, has faced sales declines, as shown in its latest earnings report. But Fernando Tennenbaum, the company's chief financial officer, told MarketWatch last month that he wasn't concerned about younger consumers forsaking alcohol, citing research that showed members of Gen Z will choose to raise a glass once they get older.

"At the end of the day, if you think about it, this is the COVID generation," Tennenbaum said. "And they are doing everything later. Remember, they didn't socialize the same way the previous generations did. They spent a lot of their college years in front of a computer, not going out with friends."

Gen Z and millennials are drinking alcohol- occasionally

But forget the industry perspective for a moment. Just talk to Maya Scopin, a 24-year-old who lives in suburban New York City and enjoys drinking in moderation with friends.

"I love a good mojito," said Scopin of her social sipping. She also noted she likes the occasional glass of wine or specialty style of beer.

Antonio Neville, a 30-year-old content creator and actor who lives in Raleigh, N.C., also hasn't sworn off booze. His go-to sip is tequila, which he points out is lower in sugar than other spirits.

Neville said his generation has learned the risks of alcohol from seeing older people consume too much. "I don't want to be like that and get drunk and do something insane," he said.

But there is always room to enjoy a sip with friends - at least every now and then, he added. In that regard, he may represent the new reality for the booze biz - drinking won't go away, but it may no longer be quite as much of an everyday thing.

Or as Neville said: "I'm more of an occasional drinker."

'I don't want to ... get drunk and do something insane.'Antonio Neville, 30, content creator and actor in Raleigh, N.C.

Analysts say the short-term problems the industry is confronting, especially regarding the economy, should eventually improve. That's the nature of cyclical challenges, after all.

So what about the long-term challenge of wooing more young drinkers like Scopin and Neville - in other words, Gen Z members and younger millennials, the cohort most identified with the current sober wave?

That requires a change in the industry's mindset, but it's one that appears to be happening, by many accounts.

"It's a case of the companies having to evolve to better address what piques the interest of consumers," said Connor J. Rattigan, a senior analyst who covers food and beverages for Consumer Edge, a data research firm.

Part of what's fueling the sober wave - or at least the tendency among younger consumers to drink less - is an increased societal emphasis on health and wellness, based partly on the idea that consuming alcohol is a risk to be avoided, experts say. Added to that is the growing popularity of cannabis, which is now legal for both recreational and medical use in a number of states and which could be drawing away some drinkers.

Companies can tackle the health issue by offering products that are additive-free or lower in calories, industry professionals note. While that might not mean the drinks are good for you, the idea is to promote the fact that they're not as bad as some others.

Dano's Dangerous Tequila has seen sales grow by 34% in 2025.

Dano's Dangerous Tequila is a five-year-old brand of additive-free booze that has seen a 34% spike in sales growth this year over last, according to the company.

Michelle Chernoff, Dano's chief operating officer, says it's not about health per se - rather, it's about being seen as a company that isn't hiding anything. And she says that's critical when appealing to younger drinkers.

"If Gen Z likes something, they like authenticity," Chernoff said. "They never like being lied to."

Gen Z also likes new packaging and bolder tastes, experts say. That explains the rise of ready-to-drink alcoholic beverages - essentially, canned cocktails - that often feature fun or unusual flavors.

The trend isn't necessarily new - it arguably came to the fore with the popularity of hard seltzer a few years ago - but it keeps gaining ground with younger consumers. That's especially true for spirits-based ready-to-drink beverages, such as those made with vodka or tequila, which are growing at nearly a 20% rate, according to the Wine & Spirits Wholesalers of America.

Talkhouse Encore is a brand of boozy soda that debuted four years ago with offerings like a blood orange tequila soda and a "Hampton Mule" vodka soda. Its sales are up 101% this year, according to Rob Minucci, the company's co-chief executive.

"We believe flavor drives the category and the industry," Minucci said.

Analysts are not necessarily saying the booze industry will ever bounce back fully, however. There's been a genuine shift in drinking habits that may be hard to overcome.

That shift appears to be reflected in a new MarketWatch poll conducted on X. Of the 1,100-plus respondents, 35% said they're spending less on alcohol and 33% said they don't buy it at all. Just 13.3% said they're spending more, while 18.8% said they're spending around the same amount.

Filippo Falorni, an analyst who tracks the U.S. beverage industry for Citi (C), said the decline in drinking among younger people is a trend that's been building for years and won't go away anytime soon. "The structural aspects are real," he said of the challenges the industry faces.

But Minucci from Talkhouse Encore also pointed out what he sees as another factor in his brand's favor - namely, the fact it's premium priced, starting at $11 for a four-pack in stores. He argues that when consumers do drink alcohol these days, they don't mind spending extra for a product they perceive as being higher quality.

That's an idea seconded by Peter Grom, a UBS (UBS) analyst who tracks the beverage industry.

"If consumers are drinking less, they might be willing to spend more and drink better," Grom said.

-Charles Passy

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August 08, 2025 11:13 ET (15:13 GMT)

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