After years of steady growth, the alcoholic beverage industry faced an unexpected downturn in 2024. As Jonathan Dore, Executive Vice President and Founding Partner at Reach3 Insights, highlighted in his recent article for Quirk’s Media, "After years of steady growth, 2024 delivered an unwelcome surprise: a rare decline in spirits sales, in part due to inflation and rising cost of essentials."

But the story behind this decline is more nuanced than just economic factors. Changing consumer behaviors, especially among younger generations, are reshaping the landscape of alcohol consumption.

The rise of mindful drinking

A significant factor contributing to the decline in alcohol sales is the shift towards moderation and wellness. Jon notes, "A majority of drinkers in 15 key markets reported cutting back, both in how often they drink and how much." A Reach3 research study found that this trend is particularly pronounced among Gen Z and Millennials, who are "drinking less, exploring alternatives, and prioritizing wellness over indulgence."

This movement isn't just about abstaining from alcohol but about making more conscious choices. The "sober curious" trend, where individuals choose to limit or eliminate alcohol for health and lifestyle reasons, is gaining momentum. As Jon observes, "The trend may not be temporary and is likely part of a broader lifestyle shift."

Economic pressures and alternative choices

While health and wellness play a significant role, economic factors cannot be ignored. Inflation and the rising cost of living (as well as the threat of tariffs) have made consumers more selective about their discretionary spending. Additionally, the increasing availability and acceptance of alternatives like cannabis and non-alcoholic beverages provide consumers with more choices.

Jon emphasizes the importance of using real-time customer insights to understand these shifts: "Brands can no longer rely on traditional assumptions about loyalty, consumption occasions, and premiumization."

Instead, there's a need to delve deeper into the "why" behind consumer choices. Tools like insight communities can help companies get ongoing pulse on what's going on with consumers and capture quant, qual and video feedback that can guide better decision-making. 

Embracing conversational research in the bev alc industry

To truly grasp the evolving consumer mindset, Jon advocates for more dynamic and conversational research approaches. He shares an example of a leading spirits brand that transitioned from static surveys to a mobile-first, conversational method. This approach allowed this brand to:

• Fine-tune their go-to-market strategy by using real-time consumer feedback to shape packaging, promotions, and messaging.

• Enhance retail execution by better understanding how product placement and in-store marketing resonate.

• Support key partners by identifying emerging drinking occasions and evolving cocktail preferences.

Such methods capture the "natural flow of real-life decision-making," providing richer insights into consumer behaviors.

How beverage brands can win in 2025

The decline in alcohol sales isn't just a temporary dip but a reflection of deeper, more lasting changes in consumer attitudes and behaviors. As Jon aptly puts it, "Understanding why people drink—or don’t—is more important than ever."

For beverage brands, this means:

• Innovating with Purpose: Developing products that align with the wellness-oriented values of modern consumers.

• Reevaluating Marketing Strategies: Crafting messages that resonate with the current ethos of moderation and mindfulness.

• Investing in Real-Time Insights: Leveraging conversational research to stay attuned to the evolving preferences of consumers.

By embracing these strategies, brands can not only navigate the current challenges but also position themselves for sustained success in a rapidly changing market. 

"The brands that succeed in this new landscape will be the ones that move past traditional, one-size-fits-all insights and embrace methods that capture how consumers think, feel and act," Jon concludes.