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A record low of 54% of American adults said they "have occasion" to drink alcohol and the loss of drinking frequency represents the biggest challenge to major beer stocks, even for long-term winners like Constellation (see above). Yet consumers turn to energy drinks more and more, boosting valuations as well as their space at key retailers. If beer & bev marketers are "in the mood management business," as RBC analyst Nik Modi contended at our 2024 Spring Conference, consumers are making it clear in 2025: they're increasingly in the mood for a surge of energy, not alcohol's mild relaxation. But is that what they want or what they need? Energy Rising at Beer's Expense? A "strong appetite from consumers toward functionality" still drives non-alc bev trends, including big gains for energy drinks, Monster ceo Hilton Schlosberg told investors in early Aug. "Energy offers a need state," he said, unpacking varied reasons for the co's strength. Better relative pricing compared to soft drinks and coffee bevs helps as well. But then there's the "whole move that alcohol is not as appealing as historically it's been." That's "creating more opportunities for energy and certainly more space for energy in customer's coolers," he said.Health & "Wellness" Change Attitudes Alcohol is not as appealing as it was. Tho often overstated, discussion about the potential downsides of drinking appears to be impacting attitudes. Over half of 18+ US adults believe 1-2 drinks per day is "bad for health," according to results of annual Gallup poll. That includes over 2/3 of 18-34 yr olds and around half of older adults, up sharply in just the past yr. The story shows up in a wide variety of sources, from big urban newspapers and morning tv news reporting on recent research and advocacy to popular podcast personalities and social media influencers talking about "toxins." Citing "wellness or lifestyle reasons," some 56% of US adults reported reduced drinking in a Harris, Ipsos and Morning Consult poll commissioned by Keurig Dr Pepper, the Wall St Journal reported last mo.Moderation Nation Gallup also tracked sharp drops in self-reported consumption in the past 2 yrs, down to 54% this yr from 58% last yr and 63% in 2023. Tho the survey is relatively small (about 1,000 adults) and has seen 4-5 pt spikes or drops from yr to yr, there's been a lot of consistency in results since Gallup started asking Americans about their drinking in 1939. And it's not alone. The prevalence of any drinking in the past month by 19-30 yr olds and 35-50 yr olds each fell by high single-digits from 2022-2024, according to results of the much larger Monitoring the Future (MTF) survey, also released in Aug.Nicotine Back In as THC Expands These shifts feel all the more seismic alongside other sizable changes for a pair of other related substances. For the first time in decades, investors may be feeling better about nicotine than alcohol: the above KDP survey results showed up in a WSJ article headlining that "Nicotine Is Hot. Beer Is Not." And the emergence of hemp-based alternatives exponentially expanded the availability of THC and other cannabinoids, whether intoxicating or not. Cannabis use may have flattened out, MTF results suggest, but vaping (nicotine and THC) and use of nicotine pouches rose quickly in recent yrs. As did psychedelics.If Time is Money, Who Can Afford a Happy Hour? Plenty of folks explain tuff trends in beer this yr by pointing to economic pressures. But what if it's not just wallets and pocketbooks feeling the squeeze? Compare rising sales of energy drinks (and perhaps a renewed interest in nicotine) to a prevailing digital culture built around speed and ease. In a world of side hustles and the gig economy, when does a beer "after work" even happen? And where? The rise of limited-service restaurants could go a long way toward explaining big drops in draft beer volume over the last decade or so, Brewers Assn staff economist Matt Gacioch explained in a recent analysis. The account base matters. And even if fast-casual chains offer cans or bottles of beer, the brief time spent there doesn't lend itself to a drinking occasion.These changes aren't just consumer driven: both the emergence of service-light models and more recent shifts at full-service outlets toward tighter menus and digital solutions are in part responses to higher food and labor costs. In US beer, focus became the name of the game after spending a decade-plus leaning hard into satisfying variety seeking tendencies. Simplicity is profitability in a market of "go-go-go." Most beer bizzes seek ways to work within that reality, rather than change it. That said, encouraged by certain brands, some portion of the population is pushing back and trying to slow down. Maybe they'll make a little time for a beer, too.

Who's Got Time for a Beer? Occasions Challenged, Consumption Down; Energy Up, Simplicity In?

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