No, Gen Z Isn't Drinking Less for 'Wellness' — They Simply Can't Afford To

Gen Z's elder rung of 21- to 28-year-olds have been given the keys to drive the U.S. alcohol market. But to the concern and chagrin of the industry, they make up a miniscule percentile of total booze spending.

A recent report in Wine Enthusiast highlighted the discrepancy in how much Gen Z is contributing to alcohol sales compared to prior generations at the same age: According to RaboBank, Gen Z accounts for just 3.6% of alcohol sales in the U.S.

And while there's been a myriad of reasons being thrown around, from wellness to a preference for other, greener substances, the most compelling argument based on RaboBank's report is that this generation would simply rather save cash than splurge on a crisp, dry Sauvignon Blanc.

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An Uncertain Economic Start

While an ever-looming threat of steep tariffs on wine certainly aren't helping the situation, Wine Enthusiast emphasizes the greater picture is that Gen Z got off to a rough start: soaring rents, inflated grocery bills and stagnant wages have created the worst financial launchpad in decades.

With these economic headwinds, Gen Z’s alcohol pullback was inevitable. And now, analysts are divided: Is this just a recession-era blip, or a paradigm shift in the $88 billion U.S. alcohol market’s future?

"When I was a kid tagging along with my family to wine country, tastings were often free or affordable," Alicia Marazzani, who lives less than an hour from California's wine country in Napa and Sonoma counties, told Wine Enthusiast. "Now each stop is like a full-on splurge. I almost never go because it's too expensive now."

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"For me, and a lot of the people my age that I know, wine isn't something we see as an investment the way older generations sometimes did," Marazzani adds. "It's a luxury we reserve for special occasions.

Marazzani's misgivings track with the industry reality. Napa Valley tasting fees have surged from an average of $15 to $45 to $60 for basic offerings in the last few years, according to a 2024 consumer survey from leading wine tourism platform CellarPass. 

Turnaround Imminent?

Rabobank’s report projects Gen Z’s alcohol spending will likely rise with future earnings — but there’s a catch. While Zoomers currently allocate the same percentage of income to booze as millennials, their thinner wallets mean fewer actual dollars flow to brewers and distillers.

Brown-Forman (NYSE:BF, BF.B)) — the spirits giant behind Jack Daniel’s, Woodford Reserve and Korbel Champagne Cellars — remains bullish on Gen Z’s long-term drinking potential despite the generation’s current spending pullback.

CEO Lawson Whiting in March waved off concerns about younger consumers’ lackluster alcohol consumption: “They [Gen Z] just don’t have the money in their pockets to be able to do things," he said on the company's Q3 earnings call. "I think some of the popular press is sort of overreading into Gen Z and what they are doing. I think that the Gen Z will come back."

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The company’s internal data reveals a key insight: Once drinkers cross age 35, their per-capita alcohol spending increases significantly in the U.S. market.

So while the younger generation's current wine consumption remains dampened, industry leaders see opportunity ahead as — like a fine wine — Gen Z matures into its prime spending years: “As people get older and their budgets shift, their tastes might also evolve. That’s where wine really shines,” fourth-generation winemaker Joel Gott tells Wine Enthusiast.

The Rabobank report had a similarly sunny disposition on the data, projecting that eventually the industry will reap rewards when Gen Z hit their 35-and-over prime spending years: "This is an ideal outcome for the alcohol industry, which can celebrate the declines in underage drinking and binge drinking while still benefiting when Gen Zers reach their more mature and responsible prime spending years."

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