Generation Z Rethinking Drinking

While the global alcoholic drinks industry remained dormant in 2024, growing by a mere 0.6 percent in volume terms due to sustained macroeconomic pressures, lifestyle shifts and geopolitical upheaval that undermined consumer confidence, India, along with a few other developing markets, stood out as a beacon of hope. India recorded a 5.3 percent growth rate in 2024, driven primarily by a low base, robust macroeconomic growth and its unique demographic composition. India has a young demographic profile, with a median age of 29.4 years, including around 330 million Millennials and 382 million members of Generation Z. The sizeable Generation Z cohort means that a large number of individuals enter the legal drinking age every year.

Generation Z is already playing a crucial role in shaping consumption patterns in India, as they represent the largest consumer cohort in 2024 and will continue to do so over the next decade. While there is growing discussion about Generation Z reducing their alcohol intake, the trend is far more pronounced in developed markets such as Western Europe and North America, where Generation Z consumers have significantly cut back on drinking. In India, a similar shift is emerging, but its scale remains smaller due to lower per capita alcohol consumption and fewer discretionary alternatives, such as cannabis or cannabis-infused beverages.

While Generation Z is seeking to reduce their alcohol consumption, this is not the case with Millennials and Generation X.

During the pandemic, a larger percentage of individuals across India were looking to reduce their consumption. However, since the lingering effects of the pandemic have dwindled, the percentage of individuals looking to reduce their alcohol consumption has declined.

When viewed by age group, Generation Z shows the strongest year-on-year intent to reduce alcohol consumption, despite starting from a comparatively lower base. Older cohorts, while beginning from higher consumption levels, are seeing a decline in intent.

Health remains the leading motivation for cutting back across all age groups, including Generation Z. These healthrelated reasons range from wanting to feel better, and avoiding the worsening of existing conditions to proactively reducing intake as a precaution. Although India is performing relatively well economically, the cost-of-living pressures continue to be a major factor driving consumers to moderate alcohol use.

Other notable influences include peer pressure (with the rise of social media), cultural and religious expectations, and the availability of alternatives, some of which like cannabis, remain illegal

Apart from the growing focus on health, inflation and the rise of ‘sober curiosity’, will continue to drive a small percentage of Generation Z consumers away from alcohol. However, the shift remains relatively gradual, and the sheer scale of India’s population, combined with low per capita consumption, will continue to support growth in alcoholic drinks, limiting the likelihood of a decline similar to that observed in most developed markets.