Gen Z's Sobering Reality: Just 4% of U.S. Alcohol Sales in 2025 as Industry Grapples with Shifting Tastes
New data from market research firm Circana, first reported by Brewbound, delivers a sobering message to the alcohol industry: despite intense marketing efforts aimed at younger audiences, Generation Z accounted for just 4% of total U.S. alcohol sales in 2025. The figures, covering the 52-week period ending December 28, 2025, underscore a market still overwhelmingly driven by older demographics.
Gen X and Baby Boomers collectively accounted for 70% of sales, with Millennials making up 25%. While a significant portion of Gen Z remains under the legal drinking age—the youngest were born in 2012—the data points to deeper, lasting shifts in consumption patterns that extend beyond mere demographics.
"The industry narrative has been fixated on courting the next generation of drinkers, but the numbers tell a different story," said Cara Piotrowski, Senior Director of Sales and Client Insights at Circana. Among legal-age Gen Z consumers, preferences lean toward bolder flavors in categories like hard cider, Mexican beer imports, ready-to-drink (RTD) cocktails, and sparkling wine—trends that overlap with Millennial behavior, which also shows strength in tequila and flavored malt beverages.
In contrast, Gen X consumers show loyalty to domestic premium beers, European imports, rum, and whiskey. Baby Boomers maintain a diverse basket including domestic economy and premium beer, table wine, liqueurs, and spirits like gin, rum, scotch, and Cognac.
A consistent trend across all age groups is the move toward premiumization. Super-premium beer's share of total beer volume grew to 40.7% in 2025, up from 39.6% in 2023, while value and standard premium segments declined. Similar, though slower, upgrades were observed in wine and spirits.
This premium shift is being complicated by the explosive growth of RTD cocktails, which are "reshaping price competition by straddling tiers traditionally occupied by spirits and premium beer," Piotrowski noted.
While total alcohol volume remains under pressure, Circana identified bright spots: high-alcohol-by-volume (ABV) products grew 11% year-over-year, and non-alcoholic beverages surged 26%. Hemp-derived THC drinks also saw rapid growth, though analysts caution they are not directly substituting for alcohol.
"Alcohol and cannabis are serving fundamentally different occasions," explained Karl Nemitz, Director of Sales and Client Insights at Circana. "Alcohol retains its role in meal-centric social gatherings, while cannabis is increasingly associated with wellness and relaxation routines."
The data suggests the alcohol industry faces a dual challenge: navigating the slow-burn entry of Gen Z into the market while simultaneously catering to the premium demands and entrenched habits of an aging, yet free-spending, core consumer base.
Voices from the Bar
Michael Torres, 42, Beverage Director in Chicago: "This isn't surprising. My Gen Z staff are more interested in mocktails and functional drinks. When they do drink, it's a specific, Instagram-worthy RTD or a craft cider—not a six-pack of domestic lager. The industry needs to adapt or keep missing the mark."
Lisa Chen, 28, Marketing Manager in San Francisco: "As a Millennial, I see my peers spending more on fewer, but higher-quality, drinks. Gen Z seems to be taking that further—prioritizing experience and wellness. The 4% figure is low, but their influence on trends is massive. They're shaping what *everyone* else is drinking."
David Miller, 61, Retired from Distribution in Tampa: "This is a wake-up call, but let's be real. Who has the disposable income? It's not kids fresh out of college. Boomers and Gen X pay the bills in this industry. All this talk about 'the future' ignores who's funding the present. Maybe instead of chasing fads, brands should better serve their loyal customers."
Jenna Rodriguez, 24, Graduate Student in Austin: "The report gets one thing right: many of us can't even legally buy alcohol! But even those who can are more conscious about what we consume—sugar content, calories, ethical sourcing. And honestly, between student debt and inflation, spending $15 on a cocktail feels irresponsible. The industry is out of touch if it thinks we'll blindly follow older generations' habits."
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