IWSR has identified six powerful drivers that will shape the future of beverage alcohol through 2026 and beyond.
At a time when brand owners are navigating financial strain, geopolitical uncertainty and shifting consumer confidence, these structural forces are redefining how, where and why consumers drink.
Outlined in the IWSR ebook Beverage Alcohol Drivers 2026, the six drivers span generational change, affordability pressures, developing market expansion, travel retail evolution, the resilience of RTDs, and the strategic importance of innovation.
1. Gen Z: Redefining, Not Rejecting, Alcohol
Contrary to popular narratives, Gen Z is not abandoning alcohol — it is reshaping its role. Participation levels remain stable compared to 2024 and higher than in 2023. However, selectivity is rising sharply. The average number of categories consumed per occasion has dropped from 2.8 to 1.8 over two years.
This generation values intentionality, moderation and experience. Fewer younger legal drinking age (LDA+) consumers are committing to “dry days,” and enthusiasm for temporary abstinence appears to have peaked in most markets.
Importantly, Gen Z is also critical to the revival of the on-trade. Across Europe, North America, Australia, South Africa and Japan, this cohort shows strong engagement with bars and restaurants — positioning them as a key lever for premium and experiential recovery.
2. Affordability Reshapes Premiumisation
The long-standing premiumisation trend is not disappearing — it is evolving. Consumers are still willing to trade up, but only with clear justification. Cost-of-living concerns and moderation habits are driving more strategic purchasing decisions.
Even high earners reduced alcohol budgets in H1 2025. Financial confidence may be improving, but spending remains cautious. Categories perceived as accessible and value-driven — notably standard beer and RTDs — are gaining ground.
Meanwhile, on-trade visits are declining again after a brief rebound in late 2024. Price sensitivity is influencing both channel choice and brand selection.
3. Developing Markets Become Growth Engines
While mature markets stagnate, developing economies are emerging as the main contributors to total beverage alcohol (TBA) growth between 2024 and 2029.
India leads projected volume expansion, followed by Mexico, Nigeria, South Africa, Brazil and Ethiopia. China, however, presents a more complex picture: overall volume decline is forecast, though segments such as RTDs, sparkling wine, imported still wine and premium spirits (gin, rum, whisky, Tequila) are expected to grow.
Developed markets — especially the US — should not be overlooked. Despite ongoing TBA volume declines, the US still offers some of the most significant value growth opportunities at category level.
4. Global Travel Retail (GTR) Evolves Into Experience
Global travel retail is recovering unevenly. Passenger numbers are rising, but volume growth lags in China and North America. According to IWSR forecasts, GTR is expected to add USD 4.2 billion in value and 10 billion nine-litre cases by 2034.
However, GTR is shifting from transactional to experiential. Storytelling, exclusivity and category exploration are becoming critical to engagement and conversion.
Shelf space is also evolving. Agave spirits and bitters are gaining visibility, while Scotch whisky’s historical dominance is increasingly challenged by American, Irish and Japanese competitors.
5. RTDs: A Strategic Multi-Trend Category
RTDs sit at the intersection of convenience, moderation and flavour experimentation. They are outperforming total beverage alcohol growth in eight of the top 10 global markets.
Although growth has moderated, RTDs continue to gain market share — particularly in markets where their TBA share already exceeds 5%. Recruitment of new consumers has slowed, but increased frequency among existing (especially younger) drinkers is driving sustained expansion.
On-trade, on-the-go and ecommerce channels present further upside.
6. Innovation: The Engine of Value Creation
Innovation has delivered 55% of the USD 231 billion in TBA value growth over the past decade. New product launches have expanded at a CAGR of +5%, led by RTDs but also supported by spirits and beer.
However, not all innovation is equal. Future success depends on incremental growth rather than cannibalisation. In a fast-moving environment, brand owners must distinguish between short-lived trends and durable consumer shifts.
Together, these six drivers form a strategic blueprint. Beverage alcohol’s future will belong to brands that balance affordability with aspiration, innovation with discipline, and global opportunity with local nuance.
Source: IWSR
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