World: Shift in drinking habits wipes out more than US$800 billion from leading alcohol companies value

A global shift in drinking habits and trends has wiped out more than US$800 billion from the value of leading alcohol companies, according to a recent Bloomberg tracking index, the Drinks Business reported on November 3.

Shares in the world’s biggest beer, wine and spirits producers have collectively lost $830 billion in market value over just four years, according to Bloomberg. A Bloomberg index tracking around 50 listed drinks companies now stands 46% below its June 2021 peak.

Bloomberg found that changing drinking habits and rising health concerns have hit earnings across the sector. The downturn has been compounded by US tariffs, high interest rates weighing on consumer spending, and elevated commodity prices. In China, weak household confidence and a ban on alcohol at official functions have further dragged on demand.

“There is a structural change going on — people are drinking less,” said Sarah Simon, an analyst at Morgan Stanley.

Major European drinks groups Diageo, Pernod Ricard and Rémy Cointreau have all seen shares fall to their lowest levels in at least a decade. Brown-Forman, the owner of Jack Daniel’s, and Australia’s Treasury Wine Estates have also slumped, while China’s baijiu producer Kweichow Moutai is trading more than 40% below its 2021 high.

Simon told Bloomberg that the sector faces further downside risk, as producers contend not only with falling revenue but also high debt levels and management upheaval.

The key challenge, Bloomberg noted, lies in changing consumer behaviour. In August, a Gallup survey found that US alcohol consumption had dropped to its lowest point since records began in 1939. Health warnings from organisations such as the World Health Organization and the US Surgeon General have further dampened demand among Generation X.

For millennials and Gen Z, alcohol has also lost its appeal. A growing list of teetotal celebrities — including Tom Holland and Katy Perry — have helped popularise the non-alcoholic trend, while the use of weight-loss drugs such as Ozempic and the rise of cannabis alternatives have added pressure.

“We’ve seen four times the impact of the financial crash on alcohol consumption,” said Laurence Whyatt, an analyst at Barclays. “The market believes there’s been some sort of structural change and that we’re not going back to the growth rates that we had in the past.”

Producers have responded with a wave of new product launches and corporate shake-ups. Carlsberg introduced a non-alcoholic cider in February, and Campari launched its alcohol-free Crodino in the US in May. Diageo last year acquired Chicago-based Ritual Zero Proof, while Moët Hennessy took a stake in French Bloom, a premium sparkling non-alcoholic brand.

Leadership changes have swept through the sector, with new chief executives appointed this year at Diageo, Rémy Cointreau, Campari, Treasury Wine Estates, Molson Coors, and Suntory. Kweichow Moutai has seen two chairmen depart within two years.

“It is notable that in an industry where a lot of changes are occurring, suddenly there is also a lot of management change,” said Simon. She added that she currently holds more “underweight” recommendations in beverages than in any other European consumer staples category.

Despite the downturn, some investors see value in the sector’s slump. Bloomberg reported that the global alcohol index is trading at around 15 times forward earnings — less than half its 2021 valuation.

US hedge fund Cook & Bynum has increased its stakes in Brazilian brewer Ambev and Peruvian brewer Backus y Johnston. “We don’t think that humans are going to stop drinking alcohol,” said partner Richard Cook, who expects brewers in emerging markets to sell more premium, higher-margin products over time.

Others have been less fortunate. Warren Buffett’s Berkshire Hathaway has seen its investment in Constellation Brands, the owner of Corona, fall roughly 40% since it began buying shares last year. Milwaukee-based Artisan Partners has increased its holding in Diageo to over 50 million shares from fewer than nine million a year ago — but the stock is down around 30% in 2025.

Andrew Gowen, head of research at Bell Asset Management, told Bloomberg that comparisons between the alcohol and tobacco industries would have been “inconceivable five years ago”. He said declining volumes are forcing producers to cut costs and focus on cheaper options.

“This industry’s been around for 7,000 years, but a lot can change,” Gowen said.