Gen Z drives renewed interest in alcohol as global spending declines

Younger legal-drinking-age consumers are returning to alcohol, even as overall spending on alcoholic beverages declines in many of the world’s leading markets. This shift comes amid ongoing cost-of-living pressures and a growing trend toward moderation, according to new research from IWSR’s Bevtrac, a global consumer sentiment tracker for beverage alcohol. The study, conducted in March 2025 and released today, june 26, shows that while consumers are generally spending less on alcohol due to economic concerns, Gen Z is defying expectations by increasing both their participation rates and the frequency of their drinking occasions.

The research covers 15 major markets, including the United States, Canada, Brazil, Mexico, the United Kingdom, France, Spain, Germany, Italy, South Africa, India, China, Taiwan, Japan and Australia. It reveals a complex global picture: consumer sentiment remains positive in India and China but is more subdued in North America and much of Asia-Pacific. In Europe, there are signs of slight recovery. Across developed markets, many consumers are prioritizing essential goods over discretionary spending like alcohol. Hopes for a strong rebound in bars and restaurants have not materialized as many drinkers remain cautious about going out.

Despite these challenges, Gen Z adults—those above the legal drinking age—are showing renewed interest in alcohol. Their participation rates have climbed to match those of the general population in most markets. These younger consumers are also more likely to try different types of alcoholic beverages and are visiting bars and restaurants more often than older generations. Richard Halstead, COO Consumer Insights at IWSR, notes that “alcohol usage among LDA+ Gen Z adults has increased significantly from April 2023 lows,” challenging the idea that this generation is turning away from alcohol.

In North America, political uncertainty has contributed to weaker consumer confidence. Policy changes under the second Trump Administration have played a role in this trend. However, there are clear signs of growth in India and Brazil. In these countries, higher-income groups remain confident and continue to spend on alcohol. The premiumization trend—where consumers trade up to higher-quality products—has slowed for wine and spirits but is accelerating for premium beers in markets like Brazil, France and Spain.

The data shows that Gen Z’s engagement with alcohol is rising sharply. In April 2023, 66% of Gen Z respondents across the top 15 markets reported drinking alcohol in the previous six months; by March 2025, that figure had risen to 73%. The increase is especially notable in the United States (from 46% to 70%), the UK (from 66% to 76%), India (from 60% to 70%) and Australia (from 61% to 83%). Gen Z consumers are also more open to trying a variety of drink categories and show above-average interest in spirits. They appear less committed to sustained moderation compared to older groups and are more likely to visit bars and restaurants.

India stands out as a market where all key indicators—consumer sentiment, recalled volume and recalled spend—are positive. Affluent urban Millennials in India feel financially secure and optimistic about the future. They are driving growth in alcohol budgets through experimentation and increased consumption. Legal-drinking-age Gen Zs in India are following closely behind them.

Brazil also shows strong growth among higher-income groups. Confidence remains high among these consumers, leading to increased spending on premium beer and a broader range of alcoholic beverages. High-income Millennials in Brazil are now more likely than before to consume vodka, gin, cream liqueurs and no-alcohol beer.

Premium beer is outperforming other categories as volumes of premium wine and spirits decline globally. In Brazil alone, premium beer volumes rose by 14% last year according to IWSR data. This trend is echoed in France and Spain where medium- and high-income drinkers are shifting from more expensive alcoholic drinks toward higher-end beers.

While recruitment into no-alcohol categories is slowing in some markets, the overall picture suggests that younger consumers—especially those with higher incomes—are playing an increasingly important role in shaping global beverage trends. As economic pressures persist worldwide, their willingness to explore new products and return to social drinking occasions may help stabilize parts of the industry facing ongoing challenges.