Consumer Spending on Alcoholic Beverages Faces Uncertainty as Economic Pressures Weigh on Industry

At the Central Coast Insights conference held on March 11 at the Paso Robles Event Center, industry leaders and financial experts discussed the shifting landscape of alcohol beverage spending in the United States. New data from NIQ and the World Data Lab projects that consumer spending on alcoholic beverages could reach over $300 billion by 2034. Wine is expected to see the highest growth at 4.5%, outpacing beer at 2.4% and spirits at 2.8%. However, speakers at the event cautioned that these projections may not be realized unless the industry adapts to current economic realities.

Phil Markert, Director of Liquor for Albertsons Companies, emphasized that the industry cannot rely on past strategies to succeed in today’s market. He told attendees, “We can’t treat 2025 like it’s 1985,” highlighting the need for innovation and resilience as the market contracts and consumer habits change.

The conference drew nearly 200 participants who expressed a sense of urgency about shaping the future of the alcohol industry. Despite optimism about long-term growth, panelists acknowledged a range of macroeconomic challenges facing producers and retailers. Callum Williams, senior economic writer for The Economist, opened the day with an overview of global economic pressures such as tariffs, inflation, and shifting consumer sentiment.

Williams noted that while some sectors—particularly technology—have thrived in recent years, most industries have struggled. Since 2019, the S&P 500 has risen 113%, largely due to tech companies’ performance. In contrast, alcohol companies have seen their value drop by 12%, making them less attractive to investors.

Despite relatively strong GDP growth and a resilient overall economy, Williams pointed out that American consumers are feeling more pessimistic than ever about their financial situation. He cited data showing that basic living expenses are now 35% higher than before the pandemic. This increase has left many households feeling squeezed, leading to cutbacks on discretionary spending such as alcohol.

Williams said that public sentiment is now more negative than during the 2008 recession or even during the COVID-19 pandemic. “People spend more on wine when they feel richer,” he explained. “And they don’t feel rich right now.” He argued that improving consumer confidence in both the economy and personal finances will be crucial for reversing declines in alcohol sales.

NIQ data presented at the conference showed that both on-premise (bars and restaurants) and off-premise (retail stores) alcohol sales have declined in value and volume over the past year. These declines are closely linked to consumer concerns about economic stability. The only significant area of growth was in ready-to-drink products, especially those sold in convenience stores. Sales of wine-based ready-to-drink beverages rose by 29.8% to $1.2 billion.

Kaleigh Theriault, director of thought leadership at NIQ, explained that consumers are increasingly choosing alcoholic beverages based on specific occasions and budget constraints. As people limit nonessential purchases, competition among brands for a share of consumer spending has intensified.

Throughout the day, panel discussions focused on strategies for overcoming off-premise challenges such as building successful partnerships with distributors and retailers. Experts agreed that offering quality products at good value and reintroducing a personal touch in customer interactions are essential for attracting and retaining buyers in today’s market.

The consensus among attendees was clear: while long-term projections for alcohol spending remain positive, immediate action is needed to address current economic headwinds and changing consumer attitudes if those forecasts are to become reality.