In the battle of bars vs. liquor stores, bars seem to be winning.
New figures released this week by Bank of America found that drinking in bars is on the rise, even as alcohol consumption declines.
According to the Bureau of Labor Statistics, alcohol spending as a share of total spending is at a nearly 40-year low.
Average spending at retail liquor, wine and beer stores continues to decline. According to the bank’s data, spending on alcohol at home will decrease by an average of 5% in 2025.
This is a meaningful decline in a large and relatively stable consumer segment. Beer, wine and liquor stores consistently generate billions of dollars a month in revenue, according to the Federal Reserve Bank of St. Louis.
Bars are on the other side of the fray for cocktail-loving customers. According to the bank, they see a 4% increase in consumer spending in 2025.
The disparity between liquor stores and bars affects the food and beverage industry; US beer, wine and liquor producers; and society as a whole. Bars are finding new ways to attract customers with expanded menu offerings and more options, such as mocktails or alcohol-free versions of familiar favorites like popular wines and beers.
According to a report by restaurant tech platform TouchBistro, 27% of restaurants surveyed said they plan to add more alcoholic beverage options to their menus in 2025.
Declining spending at stores that sell liquor, beer and wine comes at a particularly difficult moment for many of the companies that make these products.
New data from the U.S. Census Bureau revealed this month that U.S. exports of beer, wine and spirits fell last year after being targeted by boycotts launched to protest President Donald Trump’s sweeping global tariffs.
The data showed that U.S. wine exports globally fell by roughly 33% from 2024 levels. And sales to Canada — the largest overseas market for American wines — were down 77%.
Liquor and beer are not good.
Molson Coors said earlier this month that this year’s earnings are expected to fall 15%. Manufacturers of Blue Moon and Coors Light said they were facing low demand from consumers along with high production costs.
Meanwhile, Heineken said earlier this month it would cut 6,000 jobs from its global footprint this year and expected profit growth to fall.
Jim Beam, the nation’s largest bourbon producer, also recently announced it would cease production at its flagship distillery in Kentucky. It’s a major setback for the 230-year-old bourbon maker and bodes worse for US distillers.
According to Bank of America data, this broader shift in behavior is being driven by the younger generation, with analysts suggesting that a desire to socialize may be at its core.
The bank says Gen Z is leading the change – spending more of their earnings on healthier activities and less alcohol.
But whether alcohol actually benefits people by facilitating social interactions is a matter of heated national debate. Dr. Mehmet Oz said during a White House briefing on January 7 that alcohol is “a social lubricant that brings people together.” The physician and longtime daytime talk show host will serve as administrator of the Centers for Medicare and Medicaid Services in the Trump administration.
He made the remarks after the release of updated national dietary guidelines, which removed a long-standing recommendation to put a concrete limit on daily alcohol consumption. Instead of recommending no more than one drink for women and no more than two drinks for men, the updated guidance says Americans should drink “less alcohol for better overall health.”
“In the best case scenario, I don’t think you should drink alcohol, but it allows people an excuse to bond and socialize, and there’s nothing healthier than having a good time with friends in a safe way,” Oz said at the White House.
However, the online backlash was swift. The internet quickly exploded with outrage and criticism as social influencers and experts argued that the guidance was irresponsible.
Many sober advocates posted videos about the dangers of alcohol abuse and addiction, while others highlighted alternative ways to socialize that don’t revolve around alcoholism.
