The trend: The beer industry faces a reckoning as several prominent companies have seen lager and ale consumption plummet. Anheuser-Busch InBev’s beer volumes fell 3.9% in Q3, Carlsberg’s overall organic volumes declined 3%, and Heineken’s beer volumes dipped 4.3%.

• That continues a challenging stretch for the broader market: US beer production fell 1.2% YoY in 2024, per the Brewers Association.
• The downturn is even steeper in the once high-flying craft segment, where production dropped 3.9% last year. For the first time in two decades, more breweries have closed than opened over the past 18 months—including well-known names like 21st Amendment Brewery, per The New York Times.

Why is this happening? Inflation, shifting beverage preferences, and rising alcohol moderation are converging to drive the slump.

• Many consumers feeling the pinch are either trading down to cheaper brands—AB InBev noted that its economy brand Busch Light is now the second-largest volume share gainer in the industry in the US—or cutting back entirely.
• When they do indulge, more are opting for ready-to-drink cocktails like Surfside’s vodka-based hard tea and lemonade, or even THC-infused beverages.
• A significant share are walking away from beer—and alcohol—altogether. Just 54% of US adults now drink alcohol, the lowest share since Gallup began tracking in 1939. Among adults ages 18 to 34, that figure drops to 50%.

Our take: AB InBev, which recently announced a $6 billion share buyback program, is charting a path forward that others in the industry are likely to follow.

• Lean into no-alcohol beer. AB InBev and its peers are leveraging the brand equity of labels like Michelob to expand into the fast-growing non-alcohol segment, which is increasingly crowded with entrants including celebrity-backed offerings from John Mulaney and Tom Holland. Michelob Ultra Zero stands out as the fastest-growing no-alcohol beer brand so far this year.
• Look beyond beer. AB InBev’s Cutwater canned cocktail line has carved out a premium niche by emphasizing real spirits, quality ingredients, and craft-level execution in a convenient format. The brand reinforces that positioning through intentional design, sharp, cultural storytelling, and immersive experiences that underscore authenticity and attention to detail.

Still, even with these pivots, beer companies face stiff headwinds. As we noted when Molson Coors’ appointed Rahul Goyal as CEO, the path ahead is uncertain and the industry’s reinvention is far from complete.