Americans Drinking Less Beer, Young Keeping Away From Alcohol

Photo: Reuters/Daniel Becerril

SHARON, ND (REUTERS) – Shifting drinking habits, particularly reduced alcohol consumption and the rising popularity of alternatives like hard seltzers, are reshaping the US beer industry.

With Americans drinking less beer and gravitating toward beverages like hard seltzers, ready-to-drink cocktails, and cannabis-infused drinks, beer consumption has plunged to its lowest level since the 1970s, according to Brewers Association data.

Popular brands like White Claw, Truly, and High Noon, which use fermented sugar, vodka, or tequila instead of malt barley, have become ubiquitous in places where beer once reigned. Health-conscious trends, along with the “sober curious” movement embraced by millennials and Gen Z, are leading many to reevaluate their alcohol intake and opt for these alternatives.

This shift has hit the beer industry hard, particularly craft breweries, which use four to five times more malt per beverage than mass-produced beers. For the first time in 2023, microbrewery closures have outpaced new openings. The drop in demand for beer, especially from craft breweries, has severely impacted barley growers across the US, especially in Plains states like North Dakota.

Farmers like Don Nygaard, a third-generation farmer in North Dakota, are on the frontlines of this change. Nygaard used to grow malt barley for Rahr Malting Corporation, which supplies breweries with the key ingredient for lagers, IPAs, and pale ales. However, this year, with no lucrative contracts from beer producers like Rahr or Anheuser-Busch, his farm has shifted to growing food-grade barley and wheat—both crops currently priced near four-year lows.

USmalt barley prices, once around $7 per bushel last year, have fallen to under $5 per bushel, depending on location. The acreage planted with barley has also dropped by 22% compared to the previous year, reflecting the plummeting demand. Years of strong barley harvests have worsened the oversupply, and beer companies have been forced to slash contracts.

“Beer is the biggest loser,” said Bart Watson, chief economist at the Brewers Association. The reduced demand for malt barley, driven by competition from hard seltzers and lower alcohol consumption overall, is forcing farmers to find new ways to make ends meet during a time when many are struggling to break even.