Melbourne – Shares of the world’s top listed beer, wine and spirits makers have shed a combined US$830 billion (S$1.1 trillion) in a little more than four years as the industry grapples with monumental change.
That is the total loss in market value, as a Bloomberg gauge of some 50 companies stands 46 per cent below its June 2021 record high.
Shifting drinking patterns and rising health concerns have hit earnings, compounded by US tariffs, the impact of buoyant interest rates on consumer spending and even elevated commodity prices. In China, weak household confidence and a booze ban for official functions have added fuel to the downtrend.
The result is a wave of pressure facing companies behind some of the world’s most popular drinks that has left them adrift from the record rally in global equities. Instead, these businesses are struggling to adapt to new commercial dynamics that have caught many by surprise.
“There is a structural change going on – people are drinking less,” said Ms Sarah Simon, an analyst at Morgan Stanley.
In 2025, shares of European giants Diageo – home to the Johnnie Walker and Smirnoff brands – Pernod Ricard and Remy Cointreau have all hit the lowest levels in at least a decade. Jack Daniel’s owner Brown-Forman and Australia’s Treasury Wine Estates have similarly slumped. Chinese baijiu titan Kweichow Moutai is trading more than 40 per cent below its 2021 high.
Stock price declines may extend further with alcohol producers grappling not just with hits to revenue, but also elevated levels of debt and management churn as they adapt to a sector in flux, according to Ms Simon.
The main challenge facing the industry is a change in behaviour. In August, a Gallup gauge of US alcohol consumption fell to the lowest since records began in 1939. Warnings from the likes of the World Health Organisation and US surgeon-general have sapped demand among Gen X. At the same time, alcohol has become less fashionable for millennials and Gen Z.
A teetotaling trend among celebrities has compounded the decline, with Tom Holland and Katy Perry hawking non-alcoholic drinks. The popularity of GLP-1 weight-loss drugs like Ozempic and the emergence of alcohol alternatives like cannabis have also dented booze sales.
“We’ve seen four times the impact of the financial crash on alcohol consumption,” said Mr 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.”
The crunch has led to a flurry of deals and product debuts. Carlsberg unveiled a non-alcoholic cider in February and Davide Campari-Milano launched its alcohol-free Crodino in the US in May. In 2024, Diageo acquired Ritual Zero Proof Non-Alcoholic Spirits, while Moet Hennessy, the drinks arm of luxury giant LVMH, purchased a stake in French Bloom, which makes a high-end sparkling beverage.
Some corporate moves have been more dramatic, including restructurings and job cuts. Chief executives have been changed in 2025 at Diageo, Remy Cointreau and Campari in Europe, Treasury Wine in Australia, Molson Coors Beverage in the US and Suntory Holdings in Japan. Moutai has seen two chairmen depart in less than two years.
Not all are negative on the sector, however, with some seeing an opportunity to buy after the massive sell-off. The Bloomberg gauge of global alcohol stocks is trading at around 15 times forward estimated earnings, less than half its 2021 high.
Cook & Bynum, a value hedge fund in the US, has grown positions in Brazilian beer distributor Ambev and Peruvian brewer Backus y Johnston, according to Mr Richard Cook, partner and portfolio manager at the firm. The two stocks have fallen in 2025, but Mr Cook maintains an upbeat outlook given the dominance in their respective markets and steady earnings, he said.
“We don’t think that humans are going to stop drinking alcohol,” Mr Cook said. Brewers in growing emerging markets will sell more beer and “the beer they sell is going to be more premium and higher margin over time”, he said.
Uncertainty over the alcohol industry is drawing comparisons to tobacco’s trajectory that “would have been inconceivable five years ago”, said Mr Andrew Gowen, head of research for Bell Asset Management. Negative volume growth will push companies to cut costs and build out cheaper options, he said. His firm is avoiding the sector given lack of clarity over long-term prospects.
“This industry’s been around for 7,000 years, but a lot can change,” Mr Gowen said. BLOOMBERG