Gen Z’s Lackluster Drinking Habits Aren’t About Wellness—They’re Broke

BY KATE DINGWALL9 MIN READ. THE WINE ENTHUSIAST

If headlines are correct, there’s one antagonist responsible for the wine industry’s recent dips and drops: Gen Z. 

In the United States, data shows that Generation Z drinkers—meaning those between the age of 21 and 28—aren’t connecting with wine like their elders do or did at that age. They don’t drink, reports say. They’re too into wellness, claim others, or weed. 

New data from RaboBank shows it’s not wellness or a sober-curious movement deterring Gen Zs from drinking. They’re just straight up broke. 

Look at the price of Burgundy these days. Look at the price of eggs! As Gen Z comes of age with sky-high costs of living, stagnant wage growth and other difficult economic factors, they’re feeling the financial pressure and it’s affecting their relationship with booze. 

Are these lackluster drinking habits just a blip? Or will these financial pinches have long-term effects on the industry?

The Kids Are Not Alright

According to RaboBank, Gen X accounts for most of the alcohol spending in the U.S., making up 27.5% of it. Millennials and baby boomers follow close behind, tied at 25.5%. Gen Z drinkers make up a mere 3.6% of the country’s alcohol spend. 

The question that has been plaguing experts and the industry: why? 

The report hypothesizes that the slump in sales is due to the occupational hazards of being young, in school or early in your employment: money is tight. Remember being in your early 20s? You were probably drinking cheap beer and Two Buck Chuck (if you wanted to show off how classy you were). 

But Gen Z is also navigating other financial issues that prior generations haven’t faced to the same extent. 

Life is expensive right now. Gen Z is starting off their adult lives in the midst of a cost of living crisis. Rent is outpacing earnings in larger metropolitan areas. Wages are falling, debt is increasing and the median U.S. household income is below the U.S. household cost of living. 

Deloitte’s 2024 Gen Z and Millennial Survey found young adults between 18 and 29 are universally unhappy—struggling with mental and physical health and financial security. Roughly 55% of Gen Zers and millennials live paycheck-to-paycheck, an increase of five points for Gen Zs and three points for millennials from the previous year. 

“It is a pretty stark picture,” the lead author of the study, Tyler J. Vanderweele, told The New York Times. 

“I don’t even feel like I can consistently afford fruit right now,” says Charlie Dingwall, a 27-year-old veterinary scientist. “Nice wines? Isn’t in the cards. Even cheap wine is a splurge, but that’s socially and viscerally icky.”

Dingwall is also my sister—a Gen Z to my millennial. We’re six years apart, but her rent, for the same-sized, similar-quality Toronto apartment, is $1,200 more than mine was at her age. A margarita at our hometown bar cost me $8.95 when I was 27. Now? It’s $14.95.

These financial pangs are felt across the continent.

It’s not that Alicia Marazzani, a Gen Z jeweler at Charmed in San Francisco, isn’t into wine. She lives less than an hour from Napa and Sonoma. “When I was a kid tagging along with my family to wine country, tastings were often free or affordable,” she says. “Now each stop is like a full-on splurge. I almost never go because it’s too expensive now.”

In 2016, according to CellarPass, the average tasting in the Napa Valley was $20. In 2024, the average cost of an entry-level standing tasting had jumped up to $75. Reserve tastings cost $138.

“For me, and a lot of the people my age that I know, wine isn’t something we see as an investment the way older generations sometimes did,” Marazzani says. “It’s a luxury we reserve for special occasions.

Champagne-less Problems

Industry members are starting to parse out the realities of Gen Z’s financial woes. 

RaboBank’s report suggests that as they go through school and land higher-paying jobs, their income will increase, as will their alcohol spending. Even as it stands, they’re still spending the same share of their income on alcohol as millenials—they just don’t have as much income to spend.

During Brown-Forman’s recent earnings call, CEO Lawson Whiting shrugged off the worries surrounding Gen Z. “Gen Z will come back,” he says. “They just don’t have the money in their pockets to be able to do things.”

Their internal studies show that as drinkers hit the 35-and-up age group, “We’re seeing per-capita [spend] going up in the United States.”

All of these points are silver linings to industry members. But these findings aren’t signals to sit idly and wait for this generation to age into wine. 

Lilly Carrion, a Gen Z account supervisor at public relationships firm Palmer Public, finds that finances are a big concern for her, “especially with all this tariff businessaffecting the stock market and fears of a potential recession looming.”

But she’s not so sure it’s stopping her generation from drinking. She finds that her peers will shell out for things they care about, “regardless of where we’re at financially.”

Bank of America Institute finds that Gen Zers are willing to spend nearly twice what they have in savings. “We’re still traveling, buying clothes and restocking on our 12-step skincare necessities,” says Carrion. “So, I don’t think this downtrend in casual drinking has to do with just our finances—although it definitely doesn’t help.”

A Diverse Generation

But money isn’t the only factor that is impacting Gen Z drinking habits.

The recent RaboBank report also flagged the generation as more ethnically and racially diverse than previous ones. Only 50% of Gen Z members are white, while 71% of baby boomers identify as white. Around 10% of baby boomers identified as Latinx, compared to more than 20% of Gen Z.

Why is this important? White people tend to drink a lot more. 

This is especially true of white men. According to the report, white men drink twice as much as the average Black man and four times as much as the average Latina woman. 

That’s another oddity of this generational shift: women are now the majority of alcohol consumers under the age of 25. And, because women who drink tend to drink less than their male counterparts (about half) has led to a decline in overall consumption.

Parental Advisory

Another big change for Gen Z: underage drinking has plummeted.

In 1991, 64.4% of high school seniors said they had been drunk at least once in their lifetime. That started declining in 2012 and by 2024, only 33% of high school seniors reported getting drunk at least once.

Social media is a large contributing factor. Gen Z is a smartphone generation—they grew up online, in constant connection with the rest of the world. Their teen years were spent on Snapchat and documented on TikTok.

“There’s this Gen Z fear of being drunk, doing something embarrassing, and having it go viral on TikTok,” says Dingwall. “In my friend group, weed is just a significantly better dollar value and there’s no hangover.”

That deep digital connection also comes with a ubiquity of cell phone trackers, or perpetual access to your parents. If you thought heading to a party or kegger in a random field was difficult when you were a senior, try doing so under the digital supervision of your parents.  

Then there’s Covid-19. A large chunk of Gen Z members came of age during the pandemic, and spent their major drinking milestones (like high school and college) separated from their peers. 

“The younger kids in my generation missed high school house parties because of Covid-19,” says Dingwall.

Troubling Times

Gen Z went through a devastating pandemic during their formative social years. They’re broke. They’re stressed. They are under constant parental surveillance and always in the eyes of the internet. Drinking? It doesn’t quite fit into the Gen Z lifestyle just yet.

But experts are confident that they’ll take up the wine drinking mantle—hopefully in a more responsible manner than generations past. 

“As people get older and their budgets shift, their tastes might also evolve,” says fourth-generation Napa winemaker Joel Gott. “That’s where wine really shines.

You could look at these traits and tendencies as downsides, but many are looking at them as opportunities. 

“The industry has been quick to assume that younger people just aren’t interested in wine, but in reality, they’re just not interested in the traditional aspects of wine culture,” says Courtney M. Benham, the owner and president of CMB family of wines. 

He recently launched Rookie Club, a Gen Z-centric wine club. Rather than sending out club emails, communication happens via text. There’s no pressure to buy in cases: club members can purchase single bottles for under $40. And it offers themed monthly pickup events, like Swiftie bracelet-making, trivia night and basic wine tastings.

“Research shows younger consumers are drinking differently. They’re curious, social, digitally native and value experience over exclusivity,” he continues. “We needed to flip the script, design something specifically with their values, habits and social behavior in mind.”

And these doom and gloom reports often forget that Gen Zs are young. RaboBank predicts that as they age, they’ll drift towards wine and consumption will increase. 

“This is an ideal outcome for the alcohol industry, which can celebrate the declines in underage drinking while still benefiting when Gen Zers reach their more mature and responsible prime spending years,” says the report. 

Gott has faith, but there are ifs. He thinks the discussion around and marketing of wine needs to change. And that the industry needs to work on making it feel approachable and less overwhelming to get them on board. “If we can strip away all the intimidation factors and just focus on making wines that taste great for the price, I’m confident younger drinkers will find their way to the category,” says Gott.