Beverage Alcohol Market Reset Southern Glazer’s Report Highlights Five Growth Opportunities
Amid widespread discussion about declining alcohol consumption, new insights from Southern Glazer’s Wine & Spirits point to a more complex evolution taking place across the beverage alcohol industry. Rather than abandoning alcohol altogether, consumers are increasingly changing how, when and what they drink, creating new opportunities for brands, suppliers, retailers and hospitality operators.
Southern Glazer’s Wine & Spirits has released the inaugural “Raise the Bar: H2 2026 Edition,” a new trends report developed by the company’s Commercial Intelligence team. The report examines the major forces influencing beverage alcohol and highlights areas where companies can find opportunities for growth as the industry moves through a period of both cyclical and structural change.
According to Southern Glazer’s, recent declines across parts of the beverage alcohol category are beginning to stabilize. At the same time, consumer participation remains strong, although it is increasingly expressed through different categories, formats, occasions and price points.
The report identifies continued momentum in areas including ready-to-drink cocktails, wine cocktails, non-alcoholic beverages, tequila, smaller package formats and premium products. By combining third-party industry information with its own depletion, distribution and execution data, Southern Glazer’s says it can provide a broad perspective on changing consumer behavior.
“There’s been a lot of focus on what consumers are drinking less of, but that only tells part of the story,” said Zach Poelma, Senior Vice President, Commercial Intelligence at Southern Glazer’s Wine & Spirits. “What we’re seeing is a consumer who is becoming more intentional and more selective, while still finding new ways into the category.”
Poelma added that growth opportunities remain available, although they may look significantly different from those that drove the industry five or ten years ago.
Five Opportunities Shaping Beverage Alcohol
The Raise the Bar report highlights five major opportunities that Southern Glazer’s believes will influence beverage alcohol through the second half of 2026 and beyond.
1. Courting the Next Generation
Younger legal-drinking-age consumers, particularly Gen Z, are becoming an increasingly important group for beverage alcohol companies to understand. According to the report, Gen Z is over-indexing in spirits and ready-to-drink products while also increasing its spending on wine.
Flavor, convenience and accessible formats appear to be particularly important in attracting these consumers. Products that offer opportunities for experimentation or lower-risk trial can help younger consumers explore different parts of the category.
Variety packs represent one example of this trend. Southern Glazer’s reports that variety packs are outperforming single-flavor packs across RTD cocktails and hard seltzers, giving consumers the ability to sample multiple flavors in one purchase.
Gen Z is also demonstrating distinct flavor preferences. The report notes that younger consumers show a stronger preference than drinkers overall for berry-flavored beer when choosing from menus.
For brands, the findings suggest that innovation around flavor, portability and variety could be important tools for attracting the next generation of legal-age consumers.
2. Formats and Drink Types Fueling Growth
Product format and beverage type are also playing an increasingly important role in category performance.
Southern Glazer’s reports that spirits RTDs account for 94% of total spirits volume growth, highlighting the continued importance of convenient, ready-to-consume products. Meanwhile, cocktails represent 92% of total wine growth, signaling a shift toward more diverse and occasion-driven applications for wine.
Smaller formats are gaining traction as well. These products can provide consumers with greater convenience while offering lower price points and easier opportunities to experiment with unfamiliar brands or categories.
The broader trend indicates that consumers are not necessarily choosing between traditional and emerging beverage formats. Instead, they are moving between them depending on the occasion, desired experience, budget and level of convenience.
3. Owning the Moments That Matter
The occasions surrounding beverage consumption are changing, creating another major opportunity for the industry.
Consumers are increasingly drinking in different environments and at different times. Everyday occasions, social gatherings, cultural events and on-premise experiences can all influence purchasing decisions.
For brands, understanding these moments may be just as important as understanding demographic groups. A product that succeeds in a restaurant discovery environment may have a different role when purchased for a casual gathering at home.
The report highlights the importance of bars and restaurants in this discovery process. Nearly half of consumers surveyed say bars and restaurants are the best places to try a new brand.
That finding reinforces the role of the on-premise channel as an important gateway to consumer discovery. Brands that can create compelling experiences in restaurants and bars may have an opportunity to turn first-time trials into longer-term purchasing behavior.
4. The Barbell Advantage
Economic conditions are also reshaping how consumers approach beverage alcohol. Southern Glazer’s describes the current environment as a “K-shaped economy,” in which different consumer groups and spending behaviors can move in opposite directions.
This creates opportunities at both ends of the market.
On one side, consumers are looking for smaller formats, affordability and everyday value. On the other, premium products and elevated experiences continue to attract consumers willing to spend more for quality, exclusivity or differentiation.
Rather than suggesting that the entire market is moving toward either value or premium products, Southern Glazer’s analysis indicates that both trends can exist simultaneously.
This “barbell” effect creates opportunities for companies with portfolios capable of addressing multiple consumer needs. Brands can pursue growth through accessible products while also developing premium offerings that appeal to consumers seeking elevated experiences.
5. Winning the Moderation Consumer
Moderation is another major force influencing beverage choices. However, Southern Glazer’s findings suggest that no-, low- and functional beverages should not simply be viewed as replacements for traditional alcohol.
Instead, these products are increasingly complementing beverage alcohol.
Consumers may move between alcoholic and non-alcoholic options depending on the day, occasion or personal preference. This behavior creates opportunities for brands and retailers to expand their product portfolios and capture additional occasions.
The trend also extends beyond January, traditionally associated with New Year’s moderation efforts. Consumers are increasingly incorporating moderation into their lifestyles throughout the year.
For beverage companies, this can create opportunities to build broader portfolios that accommodate different consumption preferences rather than treating moderation as a temporary trend.
Data-Driven Intelligence Across the Beverage Industry
The insights in the Raise the Bar report are supported by Southern Glazer’s extensive Commercial Intelligence capabilities. The company combines third-party industry data with its own depletion and distribution information, providing a detailed view of consumer and market activity.
Southern Glazer’s says its Commercial Intelligence platform incorporates more than 15 million customer transactions annually along with approximately 250 million images documenting on- and off-premise execution.
The imagery captures a wide range of consumer-facing activity, including displays, menus and other points of interaction. Together, these data sources provide visibility across markets representing approximately 95% of the legal-drinking-age population.
This combination of scale and execution-level information allows Southern Glazer’s to look beyond broad category statistics and examine how products are actually being presented, distributed and experienced in the marketplace.
“The value of these insights is in what we do with them,” said Stephanie Janna, Vice President, Strategic Insights at Southern Glazer’s Wine & Spirits. “We’re working closely with our supplier and customer partners to translate what we’re seeing in the marketplace into strategies that can come to life across brands, channels and occasions.”
Janna emphasized that connecting consumer insights with real-world execution can help companies respond more effectively to changing behaviors and identify opportunities across different categories and occasions.
A Changing Beverage Alcohol Landscape
The findings from Raise the Bar: H2 2026 Edition ultimately point to an industry undergoing significant transformation rather than simple decline.
Consumers are becoming more deliberate about their choices, but that does not mean they are disengaging from beverage alcohol. Instead, they are exploring new formats, flavors, categories and experiences while balancing convenience, affordability, premiumization and moderation.
For suppliers and customers, the challenge is therefore not simply to increase consumption. It is to understand where, why and how consumers continue to participate in the category.
The report’s five identified opportunities—engaging the next generation, leveraging new formats, capturing important occasions, balancing value with premiumization and serving moderation-minded consumers—offer a framework for navigating this changing environment.
Mark Chaplin, President, Commercial Sales for Southern Glazer’s Wine & Spirits, said the company’s broad market perspective provides insight into how consumer behavior is evolving and what those changes mean for suppliers and customers.
“In a market that is changing this quickly, understanding where growth is happening is critical,” Chaplin said. “Raise the Bar is about turning those insights into actionable opportunities that can help our partners make smarter decisions and drive growth.”
Southern Glazer’s plans to make Raise the Bar a twice-yearly report series from its Commercial Intelligence team. Future editions are expected to provide continued insights into consumer behavior, category performance, channel dynamics and emerging growth opportunities.
As the beverage alcohol market continues to reset, the central message from Southern Glazer’s is clear: the future of the category may not be defined by how much consumers drink, but by the
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