Less Alcohol, More Choice: Why the Bar Business Is Being Rewritten

Overall alcohol consumption is declining in the US, but consumers are drinking differently, seeking moderation, variety, and occasion-specific drinks. This shift is driving growth in categories like RTDs, non-alcoholic beverages, and tequila, forcing businesses to adapt.

Ezra Kaplan

June 19, 2026 · Updated October 17, 2026 · 5 min read

Americans are not simply drinking less; they are drinking differently. Overall alcohol consumption is falling for a third consecutive year, U.S.-made spirits sales dropped more than 2% in 2025, and breweries are closing across California's Central Coast. Yet ready-to-drink cocktails are posting double-digit growth, alcohol-free drinks are the fastest-growing beverage category on restaurant menus, and tequila is expanding toward a market estimated at $13.7 billion in 2026. The paradox resolves into one thesis: consumers want moderation, variety, and occasion-specific drinks, and businesses that supply that choice are the ones staying afloat.

The Shifting Landscape of Beverage Alcohol

The industry's own framing has shifted from crisis to reset. Southern Glazer's Wine & Spirits, the country's largest beverage distributor, released its inaugural Raise the Bar trends report in 2026, describing a "cyclical and structural reset" in which declines are stabilizing while consumers keep engaging with the category in new ways. Growth, the report finds, is concentrating in ready-to-drink cocktails, wine cocktails, non-alcoholic beverages, tequila, smaller formats, and premium offerings.

The decline side of the ledger is equally concrete. Industry data cited by KSBY News shows U.S. spirits sales fell more than 2% in 2025, a slowdown extending beyond beer and wine. An IWSR report shows California spirits consumption down roughly 5% since 2019, outpacing national declines. Virginia Miller, writing in Distiller Magazine, catalogued a "very tough year" shaped by decreased consumption, health concerns, tariffs, and shifting consumer desires. IWSR itself characterizes 2025 as the third consecutive year of falling beverage alcohol volumes.

Consumer Drivers: Moderation, Choice, and Occasion

The push away from alcohol is measurable and generational. A Consumer Sentiment Survey by NCSolutions, a Circana company, found 65% of Gen Z planned to drink less in 2025 and 39% planned a completely dry lifestyle. The moderation impulse is not confined to the young: 49% of all Americans planned to drink less in 2025, up from 41% in 2024. That survey was taken during Dry January, when resolutions outlast execution, so it measures intention more than behavior.

Still, the intention has hardened into habit. Bev Industry consumer surveys reported by Distiller Magazine found Americans planning to drink less in the year ahead rose from 24% in 2023 to 49% in 2025, while in Europe 71% claim to be drinking less, per Beverage Daily. The World Health Organization's increasingly firm position that there is "no safe level" of alcohol consumption reinforces the wellness framing.

The pull side is just as important: consumers want more choice, value, convenience, and drinks matched to specific occasions, as Southern Glazer's identifies in its growth-opportunity analysis. Technomic's data captures the behavior in between: "zebra striping," alternating alcoholic and zero-proof drinks, is increasing, and among guests who ordered an adult beverage, 30% paired it with a nonalcoholic cocktail, beer, or wine.

Tequila market estimates and forecasts, by source
Source	Estimate or forecast
Grand View Research	U.S.-led North America held 63.2% of revenue in 2025; market of $12.6 billion in 2025, $13.7 billion in 2026, projected $25.1 billion by 2033 (9.0% CAGR, 2026-2033)
Market Data Forecast	U.S. tequila market forecast period 2026-2034 at a 4.16% CAGR
IWSR	U.S. volumes up 7% in 2024-25; forecast CAGR of about 5% for 2025-2030

The New Beverage Alcohol Equation: Decline + Growth = Evolution

The framework below connects the evidence into a single causal chain: driving forces shape consumer behavior, behavior reallocates spending between declining and growing categories, and businesses respond. Read it top to bottom and the apparent contradiction—falling volumes alongside booming segments—dissolves into one coherent shift toward selective, occasion-based drinking.

From driving force to business response: the connected market shift
Stage	What the evidence shows
Driving force: health and wellness	Health concerns contribute to decreased alcohol consumption, one of several factors including tariffs and shifting desires, per Distiller Magazine
Consumer behavior: moderation and "sober curious"	49% of Americans planned to drink less in 2025, up from 41% in 2024; 65% of Gen Z planned to drink less and 39% planned a dry lifestyle, per NCSolutions
Consumer behavior: choice and occasion	Consumers seek more choice, value, convenience, and occasion-specific drinks, identified as growth opportunities by Southern Glazer's
Market impact: declining	U.S. spirits sales down more than 2% in 2025; beer declining in U.S. bar and restaurant alcohol sales; California spirits consumption down about 5% since 2019, per IWSR
Market impact: growing	RTDs with double-digit growth per The Spirits Business; alcohol-free the fastest-growing menu category at 18.7% per Technomic; tequila volumes up 7% in 2024-25 per IWSR
Business response	Bars and breweries diversify menus with non-alcoholic options, cocktails, and varied drinks to serve groups with mixed preferences

The framework's analytical point is that each row is a consequence of the row above it. Moderation does not mean abstention across the board; it means the same consumer may order a full-strength cocktail one round and a zero-proof one the next, which is precisely what the 30% pairing figure from Technomic documents.