RESEARCH + INSIGHTS: EUROMONITOR INTERNATIONAL

Australia’s alcohol market faces shifting trends

Shifting consumer habits, health trends, and economic pressures reshape Australia’s alcoholic drinks industry landscape, writes Research Analysts

Arshad Mawla and Cindy Nguyen.

Evolving consumer habits have influenced shifts in Australia’s alcoholic drinks industry. In the past year, the premiumisation of alcoholic drinks has come to a slowdown due to consumers’ prioritisation of value-for-money, while accompanied by more innovations in the readyto-drink (RTD) category, driven by consumers’ changing palates and preferences.

Health and wellness trend

Euromonitor International’s Global Consumer Trends 2025 report explores key shifts shaping consumer habits. One of the trends, ‘Healthspan Plans’ identifies wellness as continuing to be a top priority. Notably, focus has shifted to long-term, proactive health management, with consumers choosing to invest in holistic wellbeing to live healthier for longer.

This trend undoubtedly impacts alcohol consumption habits, with the health and wellbeing trend reshaping Australia’s alcoholic drinks industry. Many Australians have reduced their alcohol intake or chosen to abstain altogether, particularly those under 60 years of age. According to Euromonitor data, a growing number of Australians are actively seeking to cut back on alcohol consumption, fuelling strong growth in low- and no-alcohol options compared to the overall market.

Additionally, consumers are seeking healthier alternatives within traditional alcoholic categories, prompting suppliers to innovate. For example, the rise of low-carb beers has been significant in the past year, with notable launches such as Victoria Bitter Low Carb, offering 33 per cent fewer carbs while retaining full flavour, and Hahn Ultra Zero Carb, designed for consumers pursuing a low-carb lifestyle. While these healthier options thrive, traditional alcoholic beverages, including spirits, wine, and full-strength beer, are experiencing declining sales.

Drop in premiumisation

Over recent years, the Australian alcoholic drinks market has seen a strong premiumisation trend, with consumers favouring higher-quality beverages despite their higher price points. However, this trend has reversed as rising inflation and interest rates strain household budgets, leaving many Australians with less disposable income to spend on discretionary items. As a result, high-end spirits, wines, and craft beers have seen declining sales, with consumers prioritising essential expenses.

Consumers are actively seeking healthier alternatives within traditional alcoholic categories, prompting suppliers to innovate.

For instance, Champagne has experienced a sharp drop in demand, while Prosecco has gained market share within the sparkling wine category due to its affordability, making it more accessible amid the current cost-of-living crisis. According to Euromonitor data, red wine has experienced an increase in unit price, coinciding with a decline in demand. This trend aligns with Wine Australia’s statistics, which show that red and rosé wines category recorded the sharpest drop in domestic sales.

Additionally, the growing preference for low- or noalcohol beverages, as discussed above, is further reshaping the market, as these options often come at a lower price point than premium alternatives.

Innovation in RTD

Changing consumer preferences, particularly among Gen Z and Millennial Australians, are driving significant innovation in the ready-to-drink category. The growing demand for healthier options has led to the launch of RTDs with lower alcohol content, reduced sugar, and natural ingredients, aligning with the trend toward healthier lifestyles as discussed above.

Furthermore, increased exposure to diverse cultures is fuelling experimentation with new and exotic flavours, reflecting Australia’s multicultural landscape, for example the rise of Asian culture is driving the popularity of Suntory -196. Light flavour profiles, such as lemon flavoured RTDs, are gaining popularity as they appeal to younger consumers who prefer easy-drinking options over bitter or strongly alcoholic beverages. Hard Rated, an alcoholic version of its lemon flavoured soft drink, has become a standout success in this space. Moreover, RTDs provide the convenience of ready-made cocktail flavour combinations in a can, making them an attractive option for consumers seeking simplicity without compromising on taste.

The elevated cost-of-living in Australia will influence how the alcoholic drinks industry performs. As some consumers are likely to cut drinks from their budgets to help with essential costs, there is greater potential for trading down or category shifts, with RTDs set to further benefit by offering better value for money.