The report finds that while the industry is undergoing a cyclical and structural reset, declines are stabilizing and consumers continue to engage with the category in new ways, fueling growth across ready-to-drink cocktails (RTDs), wine cocktails, non-alcoholic beverages, tequila, smaller formats and premium offerings. 

Drawing on more than a decade of investment in Commercial Intelligence, Southern Glazer’s combines third-party industry data with its own extensive depletion, distribution and execution data to provide a more complete picture of what’s happening across beverage alcohol and where the industry is headed next.

“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 of commercial intelligence at Southern Glazer’s Wine & Spirits, in a statement. “What we’re seeing is a consumer who is becoming more intentional and more selective, while still finding new ways into the category. The opportunities are there, but they don’t necessarily look the same as they did five or ten years ago.”

The report identifies five opportunities shaping beverage alcohol in H2 2026 and beyond:

Courting the Next Generation: Gen Z is emerging as an important growth cohort, over-indexing in spirits and RTDs while also increasing its wine spend. Flavor, convenient formats and opportunities for lower-risk trial are helping bring younger legal-drinking-age consumers into categories in new ways. Variety packs, for example, are outperforming single-flavor packs across RTD cocktails and hard seltzers, while Gen Z shows a stronger preference than drinkers overall for berry-flavored beer on menus.

Formats and Drink Types Fueling Growth: Spirits RTDs now drive 94% of total spirits volume growth, while cocktails account for 92% of total wine growth. Smaller formats are also gaining ground as consumers seek convenience, affordability and easier ways to explore the category. 

Owning the Moments That Matter: Consumers are changing when and where they drink, making it increasingly important for brands to connect with the occasions driving demand, from everyday consumption and social gatherings to cultural moments and on-premise discovery. Nearly half of consumers say bars and restaurants are the best place to try a new brand, reinforcing the on-premise as an important gateway to discovery.

The Barbell Advantage: As consumers navigate a K-shaped economy, growth opportunities are emerging at seemingly opposite ends of the category, from smaller formats and everyday value to premium products and elevated experiences. Rather than one dominant consumer behavior, the report points to a market where value and premiumization can coexist.

Winning the Moderation Consumer: The report finds that no-, low- and functional beverages are increasingly complementing traditional beverage alcohol rather than replacing it, creating opportunities for expanded occasions and baskets as consumers move between alcoholic and non-alcoholic choices throughout the year, not just January.

Together, the findings point to an industry in transition, with consumers increasingly moving across categories, price points and formats based on their individual preferences and needs. 

“In a market that is changing this quickly, understanding where growth is happening is critical,” said Mark Chaplin, president of commercial sales for Southern Glazer's Wine & Spirits. “Our scale and view across categories give us a unique perspective on how consumer behaviors are evolving and what those shifts mean for our suppliers and customers. 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 Commercial Intelligence capabilities combine data from third-party industry providers with its own depletion and distribution data, including more than 15 million customer transactions annually and 250 million images capturing On- and Off-Premise execution, from displays and menus to other key points of interaction. Together, these insights provide visibility across markets reaching approximately 95% of the legal drinking age population.

“The value of these insights is in what we do with them,” said Stephanie Janna, vice president of 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. By connecting the insights to execution, we can help our partners respond to changing consumer behaviors and capture the opportunities we’re seeing across the industry.”

The Raise the Bar report is the first in a new series of twice-yearly reports from Southern Glazer’s Commercial Intelligence team designed to provide suppliers, customers and the broader beverage alcohol industry with timely, data-driven insights into changing consumer behaviors, category dynamics and emerging growth opportunities.