Overview: A recent study published in the Annals of Internal Medicine indicates that alcohol consumption among adults in the United States has decreased for the first time since the COVID-19 pandemic. While rates remain above pre-pandemic levels, this decline marks a significant shift in the market landscape, prompting analysis from industry leaders like Joe Magliocco of Michter’s Distillery.
The Full Story
According to Magliocco, the whiskey industry has always been cyclical, and current trends represent normal fluctuations rather than a fundamental societal shift. He notes that history rhymes with itself, observing that while the industry has become more difficult, he remains optimistic. The decline is particularly notable among Gen Z, where consumption dropped due to COVID influence, online socialization habits, health and wellness focus, and experimentation with legal marijuana and THC drinks. Despite these drops, Magliocco emphasizes that people have been drinking wine, beer, and spirits for centuries, noting that socializing remains a fundamental human trait.
Magliocco believes it is important to look at the greater context in which the decline exists. He explains that consumption went up during the pandemic when people spent more money on alcohol while staying home. Consequently, there had to be some sort of reversion to the mean after COVID. While Gen Z saw the greatest decline in overall alcohol consumption, Magliocco believes that there is still a large portion of this group that does enjoy wine and spirits.
Brand & Industry History
Michter’s Distillery was revived during a period when consumers preferred clearer spirits like vodka, rum, and tequila over whiskey. Joe Magliocco has worked full time in the industry since 1982, witnessing market shifts firsthand. He recalls that people were choosing clearer spirits and nobody wanted whiskey at that time, yet the brand persisted through the cycle.
What This Means
Economic factors such as inflation and affordability are certainly factors, with Magliocco noting recent spending on gas impacting disposable income for going out. Tariffs have also played a role, specifically affecting Canada where sales took the biggest hit in 2024 due to import restrictions outside of Alberta and Saskatchewan. Unlike vodka or gin, which can be made and sold quickly, whiskey requires planning years in advance, with Michter’s projecting what they will sell 35 years from now.
Consumer Takeaway
The focus needs to be on quality and communication, particularly within on-premise places around the world like bars, restaurants, and hotels which remain busy as ever. Even in tougher times, there is opportunity for certain brands to grow, and Michter’s thrives in accounts that really care about hospitality and quality cocktails.
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