Alcohol isn't what it used to be but maybe that's alright

Younger folk aren't drinking much in the rich world but that doesn't mean this industry is staring at doom

- RAHUL JACOB

Few subjects reveal a greater generational divide in the developed world than the merits of having a cocktail. In the past couple of decades in the US, sales of alcohol to those between 65 and 74 years of age rose by half, even after adjusting for inflation. By contrast, sales declined by 60% to those aged 25 and under.

Japan, whose work culture and push for 'total quality management' were once known for long work days and hard drinking by the 'salaryman,' has seen a decline in overall per capita consumption by more than a quarter in the past three decades. In France, of all places, wine consumption, especially of red wines, faces what an analyst calls an "existential" decline.

Alcohol stocks on developed-world stock markets have been pummelled because it is seen as a sunset industry that is also in the sights of regulators. Diageo's shares have fallen by a third since 2020, according to an article last month by the Financial Times, which quoted its chief executive officer Debra Crew as saying that "people want to drink better, not more." This push towards the premium end of the scale is working to an extent.

Notwithstanding the doom and gloom surrounding the industry, data company International Wine and Spirit Research (WSR) estimated that in 2023, revenues from alcohol sales actually increased by 2% even as volumes declined by 1%.