Gen Z Cuts Back on Spending—and Alcohol
- Bindu Sharma
- Jul 18
- 2 min read
Gen Z around the world is pulling back on spending—and drinking less alcohol. In the U.S., India, and globally, younger consumers are shifting habits for both financial and health reasons. While overall drinking rates are not collapsing, moderation, premium choices, and alcohol-free alternatives are clearly on the rise.
In this blog, we’ll break down:
Trends in the USA and India
What it means for retail brands
What it means for brand marketing
Key Insights & Trends
Global Trend
A 2025 IWSR report notes that while more Gen Z consumers globally are of legal drinking age, binge drinking is declining. Instead, moderation and occasional premium purchases define drinking behavior.
In the UK, “zebra-striping” (alternating alcoholic and non-alcoholic drinks) is a growing trend, with 78% of Gen Z actively cutting back.
Non-alcoholic spirits and beers are booming, as younger consumers embrace the “sober-curious” lifestyle.
Globally, Gen Z prioritizes “comfort and versatility” in clothing purchases, reflecting more home-based and casual lifestyles.
United States Trends
Gen Z’s alcohol spending dropped 15% between Jan 2023 and Jan 2025, per Bank of America card data.
About 60% of Gen Z report going alcohol-free for a week or longer in the past six months—a higher rate than older generations.
Many younger Americans cite health goals and tight budgets as reasons for cutting back, despite social pressure to drink.
A 2025 McKinsey report shows Gen Z in the U.S. and Europe is reducing discretionary fashion spending because they’re going out less, with 40% citing “fewer social occasions” as a reason to shop less frequently.
India Trend
Gen Z Indians are drinking less overall but shifting toward premium spirits, wines, and craft beverages.
Surveys show rising interest in low-ABV or zero-alcohol products.
Cultural shifts and a wellness-first mindset are reshaping how young consumers socialize and spend on alcohol.
In India, a 2025 Bain & Co. report indicates Gen Z’s spending on partywear and occasion-specific fashion dropped 12% YoY, driven partly by lower frequency of nightlife and social outings.
Understand Gen Z's Values and Preferences
Digital Natives: Gen Z grew up with smartphones and social media, making them digital natives who expect seamless online experiences.
Short Attention Spans: They prefer concise, engaging content, often in the form of short-form videos.
Authenticity is Key: Be genuine, communicate your values, acknowledge mistakes
Community and Connection: They seek brands that foster a sense of community and connection.
Social Responsibility: Gen Z cares about issues like sustainability, diversity, and inclusion. Embrace diversity and Inclusion.
What does it mean for Brands
Develop alcohol-free or low-ABV products with the same aspirational branding as traditional options.
Leverage influencer marketing around wellness, mental health, and mindful living.
Emphasize premium positioning even in non-alcoholic lines to capture Gen Z’s quality-over-quantity mindset.
For fashion brands, focus on versatile, casual, comfort-driven products rather than high-frequency partywear.
Highlight experience-based marketing instead of purely product-driven messages.
A Wrap: To deliver effective marketing- focus on authenticity and transparency. Create engaging, short-form video content across platforms like TikTok, Instagram, and YouTube.
Gen Z values social responsibility, diversity, and interactive experiences, so double down on sustainability, personalisation, and phygital experiences.
In short- be ready and agile, to adapt your strategies as trends evolve.
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