Alcohol consumption declining: Why this could be good news for the beverage industry

Europe has enjoyed a long and happy relationship with alcoholic beverages for many hundreds of years now. From the fine wines of Italy to the craft beers of Belgium, Europeans have long enjoyed the many and varied alcoholic offerings. But that appears to be changing, with a decline in the consumption of alcohol across the continent. So, is the love affair over and, if yes, what does this mean for the alcoholic beverage industry?

The last century has seen fluctuations in the consumption of alcohol. However, consumption has been falling steadily since the mid-2000s, with figures from the World Health Organization (WHO) showing that between 2010 and 2020 alcohol consumption in Europe declined by 0.5 litres per capita.

So why are consumers drinking less alcohol?​

The shift away from alcohol, though gradual, has been happening for some time now, with multiple reasons. The first being the rise of the health and wellness trend​. The health and wellness trend emerged in the mid-2010s, but it really gained traction with consumers during the global pandemic.

“COVID-19 has made people more health conscious and willing to change their lifestyles to stay well,” says Douglas Broom, senior writer on Forum Agenda for the World Economic Forum.

And beverage brands are starting to notice the change.

“The world as we know it has become a lot more obsessed with health, especially since 2020,” Freya Twigden, founder of kombucha brand Fix8 Kombucha and Fibe Prebiotic Soda, told FoodNavigator. “When it comes to our physical health and mental health, we are much more aware of looking after this. Often, alcohol consumption is an easy win to change.”

And it's not just brands noticing this consumer shift, the health industry is aware of it too.

"People generally are realising that drinking alcohol is not risk free and we have far more access to information these days which allows us to realise the health benefits of reducing alcohol," Chloe Hall, founder of The Calm Gut Dietitian, told FoodNavigator. "There is a lot of focus on health in the media and I think this makes people think about the consequences of their actions and how they can take control of their health."

And with the move towards health and wellness, comes the move away from alcoholic drinks, So, what are consumers drinking instead?

Consumers have been embracing a whole host of alcohol-free beverage options, with kombucha, smoothies, protein shakes and cold-pressed juices proving particularly popular. But not only do consumers want their beverages to be healthier, it appears that they’re also looking for functional benefits leading to the rise of the functional beverage trend.

What’s more, forms of entertainment​ have changed dramatically. When once, many went to a pub or bar after work, now they might go to the gym or to a fitness class, as gym culture takes off. The terms #fitness, #fitspo, #fitfam, and #fitgoals, dominate social media as one of the most searched and posted-about forms of content. And most influencers are more likely to post an image with a post-workout protein shake than with a pint.

Another reason for consumers to reduce their alcohol consumption is cost​. The cost of alcoholic beverages has risen over the past decade making it, for some, a luxury product.

According to Eurostat, a division of the European Commission, the cost of alcohol has risen by more than 95% since 2000. While the price rises may be unavoidable for beverage manufacturers, as they face increasing production costs, it is making alcoholic beverages less accessable for consumers.

Perhaps the biggest factor influencing the consumption of alcoholic beverages is the generational divide​. It appears that the younger generation simply doesn’t view drinking culture in the same way as previous generations.

And terms such as ‘sober curious’ have entered common parlance, referring to individuals who are considering not drinking alcohol. This doesn’t necessarily have to mean that they have an addiction to alcohol, just that they would rather avoid it in their lives.

“When I first got sober curious, one persistent question kept blinking into view, like a lighthouse on a stormy night: Would life be better without alcohol?” said Ruby Warrington, author of the book Sober Curious, which inspired the term.

Events like ‘Dry January’, founded by Emily Robinson, have also become popular with people of all ages. Its aim to give people a reason to not drink alcohol for a month, also gives an insight into what life could be like without it entirely.

And last, but not least, is choice​. Consumers have a whole range of beverage options available to them, which not only offers an alcohol-free alternative, but is sometimes preferable in taste.

“Alcohol free options are better than ever,” says Twigden. “We historically didn’t have the choice of something interesting or tasty if we weren’t drinking alcohol, now we truly do.”

And for those who enjoy the flavour of beer but want to pass on the hangover in the morning, there is also a growing non-alcoholic beer industry.

“Non-alcoholic beers that mimic the taste without the booze are also an easy way to ‘partake’ in the occasion without consuming alcohol,” says Twigden.

What does the decline in alcohol consumption mean for food manufacturers?​

The decline in alcohol consumption is not necessarily a cause for concern, for alcoholic beverage producers. In fact, it could be a big opportunity.

The growing non-alcoholic drinks trend offers a huge chance for diversification. Many beverage manufacturers have already begun producing non-alcoholic versions of their products, including AB InBev, which is not only launching non-alcoholic versions of its most popular brands, but is working to address the alcohol-free stigma​ felt by some consumers.

There is also the option to branch out into healthier drinks options, particularly functional beverages, which are proving to be a major new drinks trend.

And while there is a decline in alcohol consumption, large numbers of consumers are still drinking alcohol and will continue to happily do so.