Gen Z May Drink Less, But They’re Spending More On Wine

Prohibition isn’t totally back and alcohol isn’t completely out. While research and studies show that alcohol consumption is down for Gen Z–the generation born between 1997 and 2012–market values show they’re making more sophisticated and expensive drinking choices.

Generally, Drinking is Down

A 2023 Gallup poll found that drinking for anyone under the age of 35 had dropped ten percent in the last two decades, from 72% between 2001-2003 to 62% in 2021-2023. In January, a NCSolutions survey announced that nearly half of Americans say they plan to drink less in 2025–a 44% increase since 2023, while 39% of Gen Zers plan to adopt a dry lifestyle. And not to add salt to the wound, but the industry was hurt even more when the U.S. Surgeon General issued an advisory report this past January outlining a direct link between alcohol consumption and increased cancer risk. 

When discussing Gen Z’s drinking habits, it’s important to remember that the youngest of the generation were born in 2012. Less than half of Gen Z are old enough to drink, making the market research on their drinking habits opaque. Then, the portion old enough to consume alcohol were stained by the pandemic, which led to a sharp increase and subsequent fall in alcohol consumption across all ages. Plus, they're young and early in their careers, so no, they’re probably not reaching for a glass of Burgundy.

Gen Z May Follow Millennial Drinking Patterns

Gen Z may follow a similar trajectory as millennials, who indulged in cheap spirits, canned cocktails, and boxed wines during the economic upheaval of their younger days. According to the U.S. Wine Consumer Benchmark Segmentation Survey, when Millennials turned 21 in 2003, 34% were wine consumers, compared to 22% of Gen X at the time. Their peak dropped to 26% in 2005, but has since risen back to 36% in 2023, as they follow the pattern of prior generations where the majority of wine drinkers are often older with higher incomes.

Just like millennials, Gen Zers are reaching for wine close after turning 21–they’re just opting for a bit more expensive natural wine instead of a box of Franzia. According to the U.S. Wine Consumer Survey, when Gen Z began to turn 21 in 2019, 43% were drinking wine, higher than Millennials and Gen X, with their peak falling in 2021 to 25%, and rising back up to 29% by 2023. 

Various factors are contributing to the sober-curious trend that's taking root, but the biggest mark on date is the “Covid Hangover” from an increase in alcohol consumption during the pandemic, resulting in less consumption post-pandemic. Plus for Gen Z, other beverages on the market are at play, as reports demonstrate a higher preference towards non-alcoholic mocktails or THC beverages and their dislike of wine, spirits, and beer.

Yet despite Gen Z drinking less, they're spending more on alcohol.

Mass Market Wine Is Out

To put it bluntly, mass-market wine producers are the group truly concerned about Gen Z’s alcohol abstinence. Gen Z has an eye for the stories wine can tell–sustainability practices, vineyard background and family history–the lacking elements of big box wine.

While inflation and tariffs hang over the U.S. and the budding adulthood of Gen Z, you’d be surprised to find that most cheap box wine is actually still cheap box wine–see Charles Shaw Merlot, dubbed “Two-Buck Chuck” for its consistent two dollar price point at Trader Joe’s. Today, it’s listed at $3.49 a bottle, more than before at almost a 100% price increase, but that’s nothing compared to the rate of inflation on other products. So it’s not the price turning Gen Z away.

Simply, the wine industry’s “entry-level” box wine isn’t as appealing to younger drinkers today. While the price may be low to get young consumers into wine, it also comes with the knowledge that this isn’t the best wine on the market (actually, far from it). 

An Increase in Appeal Towards Higher Priced Wine

The U.S. wine industry is stuck in the sand, keeping value wines as the mark between mass-market and premium. Below the $20 price point is where wine sales are falling and fear is growing, as over the last two years sales for value wines below the $4 range dropped by 25%, even worse than the wines below the $15 range, dropping 7% in the last year. 

And while it may be hard to believe, the new sweet spot for wine falls between the $20-25 price range, as sales at these price points are on a steady uptick. This price range gained almost a full percent of sales last year and has already gained a full percent so far this year. Sales for Chardonnay, Pinot Noir and Cabernet Sauvignon have been great, but it’s even better for Sauvignon Blanc–as the most popular varietal, it’s having bigger gains in the $25+ market. 

The number one reason people don’t drink wine is because they prefer the taste of other alcohol. The second reason being they don’t like the way wine tastes, according to a May 2024 Wine Market Council Research Report. This shouldn’t come as a surprise as the US market is relying on cheap wine as an “entry” flavor profile. 

The beverage industry is saturated with drinks below $20 and a value bottle of wine isn’t cutting it anymore. The ready to drink cocktail market continues to grow with a value of 1.01 billion in 2023 and it’s expected to reach $2.23 billion by 2029, making it easier than ever to find a drink that meets consumers needs. 

But, it’s clear an interest in good wine is growing. Wine bars such as Sauced, Four Horseman, and Aldo Sohm are just a few of the many places that have popped up across New York selling small plates and single glasses. Don’t forget the wine clubs, wine flights, tastings and restaurant pairings. Look towards Claud, the wine bar that curates exclusive dining experiences by inviting outside guests and chefs to collaborate on themed tasting menus. These hot spots are booming, as they guarantee easy, affordable options for trying good wine.

What the rest of the industry needs to be asking themselves is where does quality meet affordability? How can restaurants boost wine sales? Is it through canned wine, kegs, wine cocktails, or something else entirely? For wholesales, it’s the job of making high quality affordable wine accessible to consumers. 

People want to learn, explore, and experiment with wines, and despite the industry’s current belief, it’s an experience they’re willing to pay for. 

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