For years, the alcohol industry could count on a simple formula for growth: more people, more consumers and more sales.
That equation is beginning to change.
A new report from market research firm IWSR suggests that global alcohol consumption is set to decline over the next decade, even as the world’s adult population continues to grow. For drinks companies, it signals a major shift in consumer behaviour and a challenge that could reshape the industry for years to come, reported Reuters.
The global alcohol business has already been showing signs of strain.
Several major drinks companies have reported weaker demand since 2023. Sales have slowed across categories, while stock market valuations of leading alcohol firms have come under pressure.
According to IWSR’s first-ever 10-year forecast covering 160 markets, global alcohol consumption volumes are expected to keep falling until at least 2031.
Even by 2035, total consumption is forecast to remain 1% below current levels despite a 9% increase in the number of people legally allowed to drink worldwide.
In simple terms, there may be more adults, but they will be drinking less alcohol.
Industry experts point to several reasons behind the shift.
The first is the rising cost of living. As household budgets come under pressure, many consumers are reducing discretionary spending, including spending on alcohol.
Health and wellness concerns are also playing a growing role. More people are paying attention to fitness, calorie intake and long-term health, prompting some to drink less frequently.
Another emerging factor is the growing popularity of weight-loss drugs. Industry observers believe these medicines could influence drinking habits among some users by reducing cravings and changing consumption patterns.
Marten Lodewijks, President and Managing Director of IWSR, said changing consumer preferences have become one of the biggest challenges facing alcohol producers today.
According to him, companies can no longer depend on strategies that worked in the past and must adapt to evolving tastes.
The report suggests that beer, wine and spirits will all see lower consumption volumes by 2035.
Meanwhile, newer products such as ready-to-drink beverages and canned cocktails are expected to gain market share.
This does not necessarily mean consumers are giving up alcohol altogether. Rather, they are becoming more selective about what they drink and how often they drink it.
For producers, that means innovation could become just as important as scale.
The decline is expected to be most visible in some of the world’s largest alcohol markets.
China and the United States, currently the two biggest drinking markets globally, are forecast to see alcohol consumption fall by more than 18% by 2035.
Other mature markets, including Germany, Japan and the United Kingdom, are also expected to record significant declines.
These trends are forcing global drinks companies to rethink where future growth will come from.
While many traditional markets are slowing, India is moving in the opposite direction.
IWSR forecasts that alcohol consumption in India will rise by 38% over the next decade. By 2032, India is expected to overtake the United States and become the world’s second-largest alcohol market, behind only China.
The growth is being driven by rising incomes, urbanisation and a large young adult population entering the consumer market.
Other countries expected to see growth include Mexico, Vietnam and Colombia. However, India’s projected increase stands out among major economies.
The findings highlight a changing landscape for the global alcohol business.
For decades, growth largely came from established markets in North America, Europe and East Asia. Going forward, much of that growth may come from emerging economies where consumption is still expanding.
At the same time, drinks companies will need to adapt to consumers who are becoming more health-conscious, more value-conscious and increasingly interested in alternative beverage choices.
For the alcohol industry, the next decade may be less about selling more drinks and more about understanding a new generation of consumers. And while many parts of the world appear to be drinking less, markets such as India could play an increasingly important role in shaping the industry’s future.