Alcohol Shortage: Is Your Favorite Drink At Risk?

Alcohol consumption has been a part of human civilization for millennia, and while it has been in decline, it is still prevalent. In the US, 62% of adults reported drinking alcohol in a July 2023 Gallup survey, with the average American over 21 consuming 2.83 gallons of pure alcohol in 2021. While Americans are drinking less beer and more wine, the industry is dynamic and evolving, with trends like RTD cocktails, premiumization, and agave spirits like mezcal gaining popularity. However, the wine industry faced challenges in 2024, with declining sales, inflation, and competition from other beverages. Shifting consumer preferences, economic pressures, and health concerns influence the alcohol industry, and businesses must adapt to these changes.

Alcohol consumption trends

Alcohol Consumption Statistics

Alcohol consumption statistics vary across different sources and demographics. According to a July 2023 Gallup survey, 62% of US adults reported ever drinking alcohol, while 38% abstained completely. However, another source mentions that 60% of US consumers aged 18 and older had used alcoholic beverages in 2023, ranging from 60% in 2021 to 67% in 2022. There is a notable difference in drinking habits across generations. Young adults today are less likely to drink than young adults two decades ago, with a drop from 72% in 2001-2003 to 62% in 2021-2023 for those aged 18-34.

Premium Alcoholic Beverages

There is a growing trend towards premiumization, where consumers are willing to spend more on higher-quality alcoholic products, even if it means drinking less or on fewer occasions. This trend is particularly evident among younger consumers, with 54% of 18-34-year-olds likely to choose premium drinks. A 2022 report by Audience Collective U.S. found that when purchasing alcoholic drinks, 58% of consumers considered it important for the brand to be sustainable or eco-friendly. This sentiment was shared by 75% of Millennials and 47% of Gen X consumers.

RTD Cocktails and Agave Spirits

The market for RTD (ready-to-drink) cocktails is expected to grow, already valued at $1.01 billion globally and projected to reach $2.23 billion by 2029. Major brands are capitalizing on this trend by introducing new products in the RTD category. Additionally, the popularity of agave spirits, including tequila and mezcal, continues to rise. Mezcal production has increased significantly in the past decade, with a 743.12% growth, and a 53.45% increase in US consumption from 2021 to 2023.

Wine Industry Challenges

The US wine industry faced challenges in the first half of 2024, with a decline in domestic and international wine sales, inflation, anti-alcohol messaging, competition from other beverages, and an oversupply of grapes and wine. However, it is important to note that these challenges may not indicate a widespread alcohol shortage.

Health Consciousness and Drinking Habits

There is a growing perception that moderate drinking may be unhealthy. According to a Gallup survey in 2024, 45% of Americans believed that moderate drinking was bad for one's health, a significant shift from the early 2000s when the perception of moderate drinking being healthy or unhealthy was more balanced. This shift in perception may influence drinking habits and contribute to the evolving alcohol consumption trends.

Alcohol sales statistics

While there is no indication of a global alcohol shortage, there have been reports of localised liquor shortages in various U.S. states. These shortages are caused by a combination of factors, including supply chain issues, labour shortages, and a lack of packaging materials such as glass bottles and aluminium cans. The alcoholic beverage industry is vast, encompassing beer, wine, spirits, and other alcoholic drinks. Beer is the most commonly consumed alcoholic beverage worldwide, and the largest beer brewers are also the largest alcoholic drink manufacturers. The industry has been adapting to emerging trends, such as the growing number of consumers, particularly younger ones, who are trying to limit their alcohol intake. This has resulted in companies offering low and no-alcoholic options, as well as alternative beverages like hard seltzer.

In 2025, the revenue generated by the alcoholic drinks market in the United States is expected to reach US$318.2 billion, with at-home and out-of-home markets valued at US$186.4 billion and US$131.7 billion, respectively. The market is projected to grow by 1.50% between 2025 and 2029, resulting in a market volume of US$197.8 billion in 2029. However, it's important to note that there is a growing trend among younger generations, particularly Gen Z, to reduce alcohol consumption or abstain altogether. This trend is driven by a greater concern for physical and mental well-being. For instance, in 2024, 75% of 21 to 24-year-olds intended to participate in Dry January, compared to just 31% of consumers aged 55 and older.

The alcoholic beverage industry is dominated by companies like AB InBev, which focuses solely on beer, and Diageo, which offers a range of spirits, wine, and beer. In 2022, Diageo came second in sales to AB InBev, which also leads the market in other years. The success of brewers like AB InBev underscores the popularity of beer worldwide. However, consumers are also showing an increasing interest in alternative beverages, such as hard seltzer, and are favouring more premium options when they do choose to drink due to rising prices.

While the alcoholic drinks market is projected to grow in the United States, it's worth noting that the amount of alcohol consumed globally may be in decline, especially among younger generations. This shift in consumption patterns may impact the industry, leading to adaptations in product offerings and marketing strategies to cater to changing consumer preferences and behaviours.

Alcohol production statistics

While there is no definitive data on a worldwide alcohol shortage, there are reports of liquor and beer shortages in various regions. Local news reports from the United States indicate that liquor shortages have left shelves empty, affecting various brands and types of alcohol. Supply chain issues, labor shortages, and a lack of packaging materials, including glass bottles and aluminum cans, are cited as contributing factors. These challenges have disrupted the production and distribution of alcoholic beverages, impacting small businesses and consumers.

In states like Ohio, bar owners have struggled to stock well-known brands such as Tito's Vodka and Patron Tequila, and certain types of liquor, like bourbon, have been particularly difficult to obtain. The shortage of glass bottles has also affected distillers in Minneapolis, Michigan, and St. Louis Park, who have explored alternative bottling options.

Additionally, there has been a reported shortage of fizzy beer during the World Cup, which has prompted recommendations to consume real ale as an alternative. Weather problems in Europe have reduced the yield of certain hop varieties, impacting craft breweries and homebrewers. Large commercial breweries' contracts with hop growers have further limited the availability of hops for smaller producers.

While alcohol consumption trends vary globally, there is a notable shift towards reduced drinking, particularly among younger generations. In the United States, 30% of Americans in their 20s did not consume alcohol in the previous year, and an all-time high of 45% of Americans believe that moderate drinking is detrimental to health. These changing attitudes and consumption patterns may influence the demand for alcohol and shape the market dynamics.

Despite these reports and trends, specific data on alcohol production statistics is not readily available in the given sources. However, it is worth noting that the alcohol industry has experienced growth in certain segments, such as the RTD (ready-to-drink) cocktail market, which is projected to expand globally. The mezcal industry, for example, has witnessed a significant production increase of 743.12% over the past ten years, with a 51.11% surge between 2021 and 2023.

Alcohol consumer demographics

Age and Generation

Age and generational groups play a significant role in alcohol consumption patterns. According to Gallup, 62% of US consumers aged 18 and older had consumed alcoholic beverages such as liquor, wine, or beer as of July 2023. This percentage has fluctuated since 2018, ranging from 60% in 2021 to 67% in 2022.

Within generational cohorts, drinking habits vary. Millennials tend to consume a wider variety of alcoholic beverages compared to Gen Xers and Baby Boomers. They lead the way in spirits (47%), beer (45%), wine (45%), hard seltzer (39%), craft beer (37%), and canned cocktails (29%). Gen Z, on the other hand, is more inclined towards premium and experiential offerings. 45% of Gen Z consumers aged 21 and older had not consumed alcohol in 2023, and they are more open to trying alternative beverages like adaptogen drinks.

Racial and Ethnic Backgrounds

Alcohol consumption rates also vary across different racial and ethnic groups in the United States. According to statistics, 68% of non-Hispanic white adults, 59% of Hispanic adults, and 50% of non-Hispanic black adults consumed alcohol.

Gender

Ready-to-drink (RTD) beverages, including hard seltzers and canned cocktails, tend to be more popular among women, as well as Millennials and Gen Z consumers.

Geographical Location

On a global scale, Belarus leads in alcohol consumption per capita, with its citizens consuming an average of 14.4 liters of pure alcohol annually. This is followed by Russia, with an average consumption of 11.5 liters. The United States ranks 25th, with an average consumption of 8.7 liters per capita.

France, a country known for its wine culture, has the highest alcohol consumption among the top countries by GDP and also boasts an above-average life expectancy. India, on the other hand, has the lowest average life expectancy among the countries studied and also exhibits low levels of alcohol consumption.

Alcohol industry challenges

The alcohol industry is facing several challenges that could impact its future trajectory. One of the key challenges is the shifting consumer sentiment towards alcohol, with an increasing number of people perceiving moderate drinking as unhealthy. According to Gallup, as of 2024, 45% of Americans believed that moderate drinking was detrimental to health, marking a significant shift from the early 2000s when opinions were more evenly divided. This shift in perception is likely to influence drinking habits and preferences.

Demographic shifts and generational differences in drinking habits also pose challenges to the industry. Young adults today are less likely to drink than their counterparts from two decades ago, and older adults are more likely to consume alcohol. Gen Z consumers, for instance, tend to seek out experiences and are willing to pay for premium alcoholic beverages. They are also more open to experimenting with non-alcoholic alternatives, such as adaptogen drinks, and are curious about exploring various options in the market. On the other hand, Millennials and Gen X consumers are driving the demand for RTD (Ready-to-Drink) cocktails and premium spirits, contributing to the growth of the RTD cocktail market, which is expected to reach $2.23 billion by 2029.

Regional variations in alcohol consumption patterns further complicate the landscape for the alcohol industry. Per-capita alcohol consumption varies across states, with New Hampshire and Delaware exhibiting higher consumption and Utah showing lower consumption rates. Additionally, state-level consumption estimates can be influenced by factors such as sales to tourists and cross-border purchases due to differences in alcohol tax rates.

Another challenge for the alcohol industry, particularly in the United States, is the wine sales crisis. The first half of 2024 witnessed a decline in domestic and international wine sales, coupled with issues like declining consumption, inflation, anti-alcohol messaging, competition from other beverages, and an oversupply of grapes and wine. American wineries face additional challenges due to the lack of government subsidies, unlike their counterparts in the EU, making it difficult to compete on a global scale.

Furthermore, the COVID-19 pandemic and related disruptions have impacted the alcohol industry. Stock shortages and retail closures were experienced during the initial stages of the pandemic, affecting sales and distribution channels. However, the pandemic also accelerated the growth of e-commerce and home delivery services for alcohol retailers, leading to strong trends in online sales, curbside pickup, and home delivery.

While the alcohol industry navigates these challenges, it is also witnessing a trend towards "premiumization," where consumers opt for higher-quality products and are willing to spend more on fewer purchases. This trend aligns with the overall decline in drinking occasions, as consumers seek to indulge in higher-quality experiences when they do choose to imbibe.

Frequently asked questions