Why 'Sober Gen Z' Is Secretly Alcohol Industry's Best Customer

Gen Z is drinking less alcohol than any generation before it. That's not a hunch. It's data, from the US to the UK to India. And yet, liquor stocks are on a tear. Radico Khaitan. United Spirits. United Breweries. All quietly minting money.

So what's actually going on? 

The Sober Generation

George F Koob of the National Institute on Alcohol Abuse and Alcoholism says younger generations increasingly see alcohol as risky for their health and are more likely to go through dry spells. Others point to a quieter social life. Time spent hanging out with friends in person fell from 30 hours a month in 2003 to just 10 hours a month in 2020.

India isn't immune to this either. Surveys of young adults in Mumbai and Pune found health concerns, mental health awareness, financial constraints and social media influence were the main drivers behind more cautious, "mindful" drinking habits among urban Gen Z. Nearly half had tried a dry month. Most said they now mix alcoholic and non-alcoholic drinks through the night, rather than sticking to one or the other.

So far, so straightforward. Younger people, less booze. Case closed.

Except it isn't.

Why Are Liquor Stocks Flying?

While Gen Z are "cutting back", liquor makers are posting some of their best numbers in years. Radico Khaitan's quarterly profit jumped 73 per cent on strong demand for premium products like its Rampur whisky, with profit rising from Rs 1.31 billion. Within that, its costlier "Prestige & Above" segment surged 40.8 per cent.

United Spirits told a similar story. Net sales value in its premium segment: Johnnie Walker, Tanqueray -- rose 9 per cent year-on-year, driving an 8.4 per cent jump in overall sales.

In fact, India's alcohol market grew faster than 20 other major global markets, with volumes rising 7 per cent year-on-year to cross 440 million cases in the first half of 2025 -- and the premium-and-above segment grew even faster, at 8 per cent in both volume and value.

The Truth: Gen Z Is Drinking Better

Talk to the people actually selling the stuff, and the picture gets clearer. Gen Z hasn't quit. It has traded up.

"Premiumisation continues to be one of the key growth drivers for India's alcobev industry," Anant S Iyer, Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC), told NDTV. He points to Indian single malts, which he says grew "by around 22 per cent in 2025 to nearly five lakh cases," with homegrown labels making up roughly 92 per cent of that segment. Gen Z, he adds, is "moving across categories, exploring new flavours, formats and cocktails and choosing drinks according to the occasion rather than habit."

It's the same story at Radico Khaitan. Sudhir Upadhyay, Chief Sales Officer, calls Gen Z "an experimental and financially empowered consumer." Vodka is where this shows up most. India's vodka share of the overall IMFL industry climbed from 4.6 per cent in Q1 FY26 to 6.1 per cent in Q1 FY27, he says, with the company's Magic Moments brand posting 43 per cent year-on-year growth and crossing a million cases a month. More than 65 per cent of that volume, Upadhyay notes, now comes from flavoured vodka -- not the plain stuff.

Abhishek Modi, Managing Director of Modi Illva India and a CIABC board member, has watched the same shift play out across the industry. Vodka, he says, has flipped from "around 60 per cent plain and 40 per cent flavoured" a few years ago to "closer to 20 per cent plain and 80 per cent flavoured" today. His read on it: premium no longer just means imported or expensive. "Consumers are much more willing to pay for quality, craftsmanship and products that offer something distinctive," he told NDTV.

Varun Jain, Founder & CEO of Smoke Lab, sees it in how younger buyers actually shop. Gen Z's "purchase journey," he says, "is increasingly shaped by digital discovery, social influence and curiosity around a product's provenance, flavours and overall experience." His own brand, a Basmati rice-based vodka distilled five times and flavoured with things like saffron and green chilli mango, is betting entirely on that curiosity.

Rupi Chinoy, Director at South Seas Distilleries, frames it as a generational reset in what luxury even means. Gen Z buyers, he says, are drawn to spirits with "a strong sense of originality and place" -- his own single malt, finished in mahua casks, has picked up gold at the International Wine & Spirit Competition partly on the back of that appeal. "The new definition of luxury in spirits," he says, "lies not merely in price or prestige, but in provenance, originality and the richness of the story behind every pour."

Two Trends, One Consumer

Put the two halves together, and the paradox stops being a paradox.

Globally, Gen Z really is drinking less -- driven by health concerns, tighter budgets and a culture that no longer treats a drink as a rite of passage. That part is real, and it's backed by two decades of survey data.

But in India, a financially empowered slice of that same generation is doing something slightly different. They're not necessarily drinking more often. They're spending more per drink -- trading a cheap whisky-soda for a craft cocktail, a familiar brand for a single malt with a story attached. Fewer occasions, bigger cheques. That's premiumisation in one line.

Liquor companies have simply followed the money. Every executive quoted above is chasing the same customer: someone who drinks less out of habit, and more on purpose - and who's happy to pay extra when a brand gives them something worth talking about.

So next time someone tells you Gen Z has given up on alcohol, they're not wrong. They've just left out the second half of the sentence: they've given up on cheap alcohol.