Introduction: A Turning Point for Big Alcohol
For decades, the global alcohol industry – often referred to as “Big Alcohol” – has enjoyed a position of dominance, weathering health promotion initiatives, alcohol policy initiatives, and shifting consumer preferences.
However, a perfect storm of systemic challenges is now threatening Big Alcohol’s power and stronghold. The industry faces declining consumption trends in key markets, rising health awareness, economic pressures, and regulatory crackdowns. These factors are forcing Big Alcohol to rethink and adapt its strategies, and in many cases, respond with aggressive lobbying, marketing, and expansion tactics to maintain its influence and profits.
In this analysis, I’m exploring seven major systemic challenges facing the alcohol industry and how it is responding to these threats. This overview is critical for policy makers and advocates to understand how and why Big Alcohol is operating-
1. Declining Alcohol Consumption Among Younger Generations
A generational shift in attitudes toward alcohol is unfolding. Young consumers in Western markets – and around the world- are consuming significantly less alcohol than previous generations.
In the UK for example, 36% of adults under 25 now identify as people living free from alcohol. In the US, alcohol consumption among adults under 35 has dropped from 72% in 2002 to 62% in 2022.
The reasons include a greater focus on health and fitness, concerns about mental well-being, and a cultural shift toward sober curiosity, and healthier and more inclusive social norms.
Alcohol Industry Response:
- Aggressive Marketing & Social Media Targeting: Alcohol brands are using influencer partnerships, music festivals, and social media campaigns to maintain their grip on younger consumers.
- Expanding Alcohol-Free Offerings: Beer giants such as Heineken and AB InBev are investing heavily in non-alcoholic beer and spirits – while at the same time, but hidden from public discourse, also investing in high-alcohol strength beverages targeting youth, such as ready-to-drink products.
- Shifting Messaging: Campaigns are emphasizing the flawed, misleading, and harmful concepts of “moderation” and “responsible drinking” while maintaining brand loyalty.
2. The Rise of Diet Drugs and Health-Conscious Consumers
The surging popularity of weight-loss drugs like Ozempic and Wegovy has introduced a new challenge for Big Alcohol. Many users of these medications report a decreased desire for alcohol, further cutting into an already declining market. Evidence also shows that consuming alcohol while taking weight-loss drugs can be counter-productive or even harmful.
Along with an overall increase in health consciousness and awareness of harm from alcohol even in low doses, people are also becoming aware of alcohol’s empty calories and the negative impact of alcohol on efforts to lose weight and maintain a healthy weight.
Alcohol Industry Response:
- Repositioning Alcohol as Part of a “Balanced Lifestyle” to counteract the perception that alcohol is incompatible with weight management.
- Investing in Low-Calorie and Low-Carb Alcoholic Products to appeal to fitness-conscious consumers.
- Challenging Scientific Research linking alcohol consumption to obesity and metabolic disorders, a tactic reminiscent of Big Tobacco’s strategies.
3. Growing Awareness of Alcohol’s Health Risks
Scientific consensus is solidifying around the link between (low doses of) alcohol and serious health risks, including cancer, heart disease, and cognitive decline.
The World Health Organization (WHO) and various national health bodies have issued clearer statements, low-risk alcohol use guidelines, and warnings about the risks from alcohol consumption.
Alcohol Industry Response:
- Fierce Opposition to Health Warnings: Alcohol companies are lobbying aggressively to block or weaken cancer warning labels on bottles. Big Alcohol is lobbying fiercely against dietary guidelines and low-risk alcohol use guidelines that follow world class evidence.
- Sponsoring Industry-Friendly Science: Just as Big Tobacco once funded research to downplay smoking risks, Big Alcohol is investing in studies that emphasize the benefits of alcohol consumption.
- Legal and Trade Challenges Against Public Health Measures: Some governments, such as Ireland, have introduced new labeling laws, but alcohol giants are resisting similar moves in other countries through legal and trade action.
4. Economic Pressures and Premiumization
The global economic landscape is shifting, with inflation and economic downturns affecting consumer spending. For many people alcohol has become or is becoming less affordable.
While some consumers are cutting back on alcohol purchases altogether, others are shifting toward premium products, choosing quality over quantity. It is Big Alcohol’s strategy to maintain and protect profit margins.
Alcohol Industry Response:
- Doubling Down on Premiumization: Alcohol brands are investing heavily in premium liquors, craft beer, and high-end wines to maintain profitability despite declining volume sales.
- Targeting Affluent Consumers: Marketing strategies increasingly cater to wealthier demographics less affected by economic downturns.
- Price Manipulation & Discounts: In price-sensitive markets, companies are offering strategic discounts while lobbying against alcohol tax increases.
5. Regulatory and Taxation Challenges for Big Alcohol
Governments worldwide are improving their alcohol policy efforts, implenting international standards in regulation the alcohol industry across alcohol advertising, pricing, and sales. From higher taxes in Sri Lanka, Ghana, and Brazil, to alcohol advertising bans in Lithuania, to placing common sense limits on alcohol availability in Spain, Kenya, and Vietnam, policymakers are stepping up action to promote health through alcohol policy.
Alcohol Industry Response:
- Aggressive Lobbying Against Alcohol Tax Increases: The alcohol industry is fighting higher alcohol duties by claiming they harm local businesses, the overall economy, and consumers.
- Pushing Back Against Minimum Pricing Laws and other alcohol policy best buys: Policies that establish a floor price for alcohol, like those in Scotland, Wales, Australia, and Canada, are being met with alcohol industry resistance.
- Sabotaging and undermining existing laws and regulation especially in terms of alcohol marketing and alcohol availability.
- Attacking existing alcohol policy systems.
6. Supply Chain and Production Issues
The alcohol industry is not immune to the supply chain disruptions affecting global markets. Shortages of raw materials, rising transportation costs, and climate change are making alcohol production more expensive and unpredictable.
Alcohol Industry Response:
- Diversifying Supply Chains: Companies are shifting production and sourcing strategies to mitigate disruptions.
- Pushing the Cost onto Consumers: Big Alcohol deploys higher prices for their products due to “supply chain challenges.”
- Investing in Sustainability Initiatives: Some alcohol giants are pivoting toward sustainability to offset criticism – as part of corporate greenwashing strategies.
7. Expansion into Emerging Markets
As Western markets decline, alcohol companies are aggressively expanding into Asia, Africa, and Latin America, where alcohol policy standards are lower and alcohol consumption has historically been much lower than in Europe and North America.
Alcohol Industry Response:
- Targeting Countries with Weak Alcohol Policies: Big Alcohol is leveraging its influence to prevent evidence-based alcohol policy initiatives in emerging markets.
- Tapping into Cultural Norms: Marketing campaigns are designed to associate alcohol with status, modernity, and success.
- Undermining Public Health Efforts in Low- and Middle-Income Countries: Industry groups work to delay or weaken government regulations that could limit alcohol marketing and availability.
Conclusion: A More Aggressive, Adaptive Industry
Big Alcohol is at a crossroads. The combination of declining consumption in key markets, increased awareness of health risks, WHO-recommended alcohol policy initiatives, and economic shifts is forcing the alcohol industry to adapt.
Rather than accept these trends as an inevitable decline, alcohol giants are fighting back with a multi-pronged strategy: aggressive lobbying, marketing reinvention, product diversification, and expansion into less regulated markets.
The coming years will determine whether Big Alcohol follows the path of Big Tobacco – relegated to a low-growth, highly regulated industry – or manages to maintain its dominance through adaptability and aggressive resistance to public health efforts.
