Part 1: How Demand Quietly Left the Building
For decades, the global alcohol industry has been telling itself a comforting fairy tale: that temporary shocks, cyclical downturns, or price sensitivity might dent sales, but long-run demand would always recover. Affluent consumers would keep trading up, younger generations would eventually drink like their parents, and any dip in volume was a pause, not a pivot.
This fictional story is now colliding with a far less convenient reality. The world’s heaviest-drinking, most profitable consumers are stepping back, structurally and for good, while the industry keeps producing as if nothing fundamental has changed.
In my personal opinion, we are witnessing a masterclass in institutional denial. Global wine and spirits leaders are confronting a problem they systematically refused to plan for: a widening, accelerating structural mismatch between how much alcohol they produce and how much consumers in mature markets actually want to drink. Warehouses across Europe, North America, and parts of Asia are swollen with “trapped capital,” unsold wine and aging spirits that are the physical manifestation of strategic miscalculation.
The 30-Year Slide: Why the “Cyclical” Excuse is a Lie
Industry narratives continue to frame the slowdown as a short-term correction after pandemic excess. Yet the data tell a different, more honest story.
In high-income regions including North America, Western Europe, Japan, and Australia, alcohol consumption has been declining steadily since at least the early 1990s (Wei et al., 2025). Analysis from the Global Burden of Disease project shows that between 1990 and the early 2020s, both alcohol use disorder prevalence and alcohol-attributable mortality declined significantly in these regions (Wei et al., 2025). This reflects not only fewer drinkers overall but, crucially, a contraction of the heavy-drinking population that historically accounted for a disproportionate share of total volume.
My Opinion: The industry’s growth models were never built on moderate, occasional drinkers. They were built on the mathematical reality that a small percentage of heavy consumers drove the majority of volume. When that segment contracts through health awareness or aging, the entire demand curve shifts in ways that “mindful moderation” among occasional consumers simply cannot offset.
Wine’s Demotion: From Daily Ritual to Occasional Indulgence
Wine offers the clearest illustration of this cultural shift. In traditional wine-producing countries such as France, Italy, and Spain, long-term declines have been driven primarily by the erosion of everyday wine drinking, not by substitution toward beer or spirits (Pérez-Rodríguez et al., 2024). Wine has fundamentally shifted from a routine dietary component woven into daily meals to an occasional, situational indulgence.
Research indicates that older, habitual wine drinkers are not merely abstaining temporarily; they are permanently reducing frequency. The result is a pattern that remains surprising to an industry built on volume: volumes are falling faster than value. Consumers are sometimes willing to pay more per bottle, but they are buying and consuming far less of it overall (IWSR, 2024).
Spirits: The Pandemic Spike was a Mirage
Spirits are traveling the same downward curve, but with greater volatility. In the United States and Western Europe, spirits consumption surged briefly during the pandemic, a spike executives misread as a permanent shift rather than a contextual anomaly. By 2024, volumes in most mature markets had fallen below pre-pandemic levels, leaving producers with massive excess inventory waiting for demand that shows no signs of returning (IWSR, 2024).
Unlike wine, spirits are closely associated with nightlife intensity and altered states, associations that make demand especially vulnerable to the growing cultural premium placed on mental clarity and sleep quality. This vulnerability is amplified by a generation that drinks differently on purpose.
The Gen Z “Catch-Up” Myth
The industry is pinning its hopes on generational replacement, but cross-national longitudinal studies show that adolescents and young adults in high-income countries are drinking substantially less than previous cohorts at the same age (Rossow et al., 2021).
Importantly, there is little evidence that these cohorts “catch up” as they age. Lighter drinking appears to be a stable cohort characteristic, a fundamental feature of generational identity, not a youthful phase.
The Implication: There is no younger generation waiting in the wings to absorb the surplus supply. The consumers who might have formed the foundation for growth in the 2030s are already here, and they are telling us they aren’t interested in drinking the way their parents did.
Geographic Displacement: Growth Exists, Just Not for This Inventory
While consumption in mature markets falls, growth persists in parts of South Asia, Latin America, and Africa, driven by urbanization and rising middle-class incomes (IWSR, 2024). India, for example, has emerged as a vital growth market for spirits.
However, these markets cannot simply absorb the massive surplus inventory created in the West. The scotch aging in Scottish warehouses and the wine sitting in French caves were produced with different consumers, occasions, and price points in mind. This geographic mismatch represents a fundamental challenge to the industry’s strategic coherence.
The Pharmacological Wild Card: GLP-1 Medications
Overlaying cultural shifts is a pharmacological accelerator the industry has barely begun to acknowledge publicly: GLP-1 receptor agonists (e.g., Ozempic, Wegovy).
Peer-reviewed research shows that these medications are associated with substantially reduced alcohol craving, lower overall consumption, and decreased relapse risk (van der Zwaal et al., 2025; Zhu et al., 2025). Experimental studies suggest these drugs blunt alcohol’s rewarding effects at a neurochemical level, fundamentally reducing motivation for repeated drinking (DiFeliceantonio et al., 2025).
The Existential Threat: GLP-1 adoption is highest among middle-aged, health-conscious consumers with significant disposable income, precisely the demographic that once drove premium wine and spirits growth. You cannot “story-tell” your way out of a biochemical intervention that makes alcohol less rewarding.
The Structural Shock: What Comes Next?
Taken together, these forces amount to a structural disruption the industry cannot message its way out of. The industry is built on the assumption of habit, but when habit is replaced by intentionality, or pharmacological intervention, the math of “Infinite Growth” collapses.
In Part 2, we look at investors who have erased $830 billion as demand collapses and analyze the balance-sheet reckoning, the $2.7 billion inventory trap, and the brewing fight for relevance.
References
DiFeliceantonio, A. G., et al. (2025). Neurochemical modulation of alcohol reward: The impact of GLP-1 receptor agonists. Journal of Neuroscience Research.
IWSR. (2024). Global Beverage Alcohol Market Report: 2024 Trends and Forecasts. London: IWSR Drinks Market Analysis.
Pérez-Rodríguez, F., et al. (2024). The erosion of daily wine culture: Longitudinal trends in Mediterranean consumption. European Journal of Marketing and Economics.
Rossow, I., et al. (2021). The great decline: Adolescent drinking trends across high-income countries. Drug and Alcohol Review.
van der Zwaal, E. M., et al. (2025). GLP-1 receptor agonists and alcohol consumption: Clinical outcomes and craving reduction. The Lancet Psychiatry.
Wei, Y., et al. (2025). Global burden of alcohol use: Trends in consumption and health outcomes 1990–2023. Journal of Global Health Metrics.
Zhu, Y., et al. (2025). Pharmacological interventions in alcohol use disorder: The emerging role of GLP-1 analogs. Nature Reviews Drug Discovery.
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