Two Studies Offer Insight Into Alcohol's Performance
It’s no great shock that beer isn’t doing so well right now, but a couple of recent reports help describe what’s going on at a granular level. On Feb 13, Bank of America released “Raising the bar or last call?”, while Culinary School Escoffier offered “2025 Alcohol and Beverage Trends: Key Statistics on What’s Pouring in Bars and Homes” in late January
Escoffier’s report summarizes findings found elsewhere but contains a few nuggets of interest. The most shocking was consumer sentiment toward alcohol. Twenty years ago, just 22% of Americans thought 1-2 drinks per day was unhealthy, and that ticked up to 28% a decade ago. Now? Nearly half (45%) think moderate drinking is unhealthy. Possibly worse, if you’re looking a decade or two into the future, that trend appears to be driven by younger people. Half of millennials say they’re likely to order non-alcoholic beverages, and 59% of Gen Z say they’re NA-curious (compared with 38% of Gen X and 23% of Boomers). Take their comments with at least a grain of salt, however; the number of people who say they regularly drink has barely budged over the decades—that’s the “revealed preference” of behavior, which is always more reliable than polling data.
Finally, one emerging bright spot may be home delivery. Looking at data from DoorDash, restaurants are increasingly sending booze out with orders of kung pao chicken. Beer is the most common choice here, and both restaurants and consumers are overwhelmingly (90%+) in favor of having the option. This is an interesting emerging market—a gray area between on-premise drinking and store sales. Everyone was compelled to go to delivery during Covid, and it is still a popular choice, so getting beer into the mix is an upside.
That on/off premise dichotomy happens to be the subject of B of A’s study, which makes this an excellent moment to segue. The bank uses its own data set, based on randomized, anonymized transactions. They were looking specifically at January sales data, which is especially interesting because of Dry January. The first surprise finding was that more people went out in 2025 than 2024, while store sales declined: “Spending growth at bars up 1% YoY in January 2025,” they wrote, “has improved since last fall. Additionally, spending at liquor, beer, and wine stores (referred to as alcohol stores), declined 5% YoY in January.”
B of A suggests this may be related to inflation. A year ago, on-premise inflation was running 4% but was down to 2% last month according to CPI. Meanwhile, inflation in store prices had already flat-lined from their Covid peaks and were running at a little more than 1% both years. The price of going out seems to be stabilizing, accounting for growth there. B of A speculates that people still had some of their Covid booze left, and weren’t restocking the way they had during the pandemic, leading to the dip in store sales.
The next item was a real shocker, and not in a good way. Looking back at four years, B of A identified a predictable pattern. Following the bad Covid year of 2022, 2023 was a great year, especially among Gen Z, as people rushed out as soon as they could get out of the house. For Boomers, that stabilized in January 2024 and 2025, but Gen Z actually spent less in 2025 than they did in 2022. Here’s the graph.
One last point, and you can see this illustrated by the graph at the top of the post. Inflation in food prices since 2019 at the grocery prices are more than double that of alcohol: “Grocery (food at home) prices, up 29% in January 2025 compared to 2019 levels, have increased much more than alcohol consumed at home, up only 12% (Exhibit 6). And given that grocery prices are rising again, in our view, it’s likely that the price incentive to economize alcohol consumption may remain for the time being.” That must be a factor in home-drinking. Alcohol prices didn’t shoot up the way eggs and milk did, so canned beer remained a relative value.
I have a hunch that inflation is playing a witchy role here that will take some time to discern. B of A found that bar spending had rebounded more among older drinkers, and it was a linear relationship—the younger the drinker, the smaller the post-Covid rebound. Some combination of a drinker’s age, the amount of money they can devote to staples (food) as opposed to luxuries (alcohol) along with more or less defined habits of bar-going all probably play a role in these figures. Whether they represent stable trends or a continuing and still aberrant pandemic effect will be most interesting to see. And a lot will be riding on the answer.