Latest / The Demographics Podcast with Fexingo: Aging Populations, Birth Rates, and Economic Impact / How Falling Birth Rates Reshape the Beer Industry
Transcript
- Lucas: Luna, if I asked you to picture the typical beer drinker, what comes to mind? Luna: Honestly? A guy in his twenties or thirties, probably at a bar or a barbecue, holding a lager. Lucas: Right, and that image has driven the beer industry for decades. But here's the thing — that guy is becoming a smaller part of the population. Birth rates in the US and across Europe have been falling for years, and the demographic center of gravity is shifting older. Lucas: That has huge implications for what people drink. Today we're going to look at how the beer industry is being reshaped by an aging, shrinking population of younger adults. Luna: It feels like we've already seen some of that shift. Craft beer exploded, then seltzers, now non-alcoholic options. Is that all tied to demographics? Lucas: A lot of it is. Let's start with the macro picture. In the US, the number of people aged 21 to 34 — the core beer-drinking years — peaked around 2018 and has been declining since. By 2030, that cohort will be about 5 percent smaller than it was in 2015. Luna: So fewer young people means fewer beer drinkers overall, right? But per capita consumption has been falling too. Lucas: Exactly. According to the Beer Institute, US beer consumption per person over 21 fell from about 28 gallons per year in 2000 to around 24 gallons in 2025. Part of that is competition from wine and spirits, part of it is health consciousness, but a big part is simply that the population is older, and older people drink less beer on average. Luna: I've read that after age 55, beer consumption drops off pretty significantly. People switch to wine or spirits, or just drink less overall. Lucas: Right. Data from the National Health and Nutrition Examination Survey shows that adults over 55 consume about 40 percent less beer than those aged 21 to 34. And with the 55-plus cohort growing rapidly — it's now over 30 percent of the US adult population — that's a structural headwind for the industry. Lucas: Now, the industry has responded in a few ways. One is the rise of craft beer, which appealed to older, more discerning drinkers willing to pay more for flavor. But even craft beer growth has slowed — it's now about 13 percent of the market by volume, and that share has been flat for a couple of years. Luna: So what's the next move? I keep seeing non-alcoholic beer everywhere. Is that the answer? Lucas: Non-alcoholic beer is growing fast. According to NielsenIQ, NA beer sales in the US grew by over 20 percent in 2025, reaching about $500 million. That's still a tiny slice of the overall beer market — about 1 percent — but it's the fastest-growing segment. Luna: And it fits the demographic shift perfectly. Older drinkers who still want the taste but don't want the alcohol or the calories. Plus, younger people are drinking less alcohol too. Lucas: Exactly. The big brewers are all in. Anheuser-Busch InBev has Budweiser Zero and Stella Artois Liberté. Molson Coors has Coors Edge. Heineken has Heineken 0.0, which is actually the global leader in NA beer. They're betting that as the population ages, NA beer becomes a staple for former regular beer drinkers. Lucas: But there's another angle: the shift away from the traditional keg and bottle distribution model. Older drinkers buy more beer in cans from grocery stores and drink at home rather than at bars. That changes margins and marketing strategies. Luna: And it also affects the types of beer being produced. Lighter, lower-calorie options have been gaining share — not just NA but also light beers. Bud Light is still the top-selling beer in the US, but its sales have been declining. Meanwhile, brands like Michelob Ultra, which is low-carb and marketed to active older adults, have grown. Lucas: Michelob Ultra is a great case study. It's owned by Anheuser-Busch, and its sales grew about 5 percent in 2025 while the overall beer market shrank slightly. The marketing is all about fitness, moderation, and an active lifestyle — targeting that 35-to-55 demographic that's still healthy but not in their twenties anymore. Luna: So the playbook seems to be: fewer young people, so you need to sell to older people, and you need to give them products that fit their health priorities and their drinking occasions. Lucas: Right. And it's not just the US. Europe is even more extreme. Germany's beer consumption per capita has fallen by about 25 percent since 2000. Japan's beer market has been shrinking for decades as the population ages. Brewers there have responded with beer-like flavored drinks and zero-alcohol options, but overall volume keeps declining. Luna: I remember reading that in Japan, the legal drinking age is 20, but the number of 20-year-olds has been declining for years. So breweries there are actually targeting the elderly with low-alcohol canned cocktails and easier to open packaging. Lucas: That's exactly the kind of adaptation we're talking about. In the US, we're seeing similar things: smaller packaging sizes for older drinkers who want less volume, and more variety packs to appeal to smaller households — because older people often live alone or as couples, not in big groups. Lucas: And then there's the cannabis angle. In states where marijuana is legal, beer sales have taken a hit. Younger people especially are substituting cannabis for alcohol. According to a study by the University of Colorado, states with legal recreational marijuana saw a 15 percent drop in beer sales within the first two years. Luna: That's a huge number. And it's another demographic trend — younger people are more open to cannabis than older generations. Lucas: So the beer industry is being squeezed from multiple directions: fewer young entrants, health-conscious older drinkers, and competition from cannabis. The winners are likely to be brewers that can adapt their portfolios to an older, smaller customer base with different tastes. Luna: It makes me wonder: is there any upside for beer in an aging population? I mean, older people have more disposable income, right? They might spend more per drink. Lucas: There is some of that. Craft beer and premium imports have higher margins, and older drinkers are more willing to pay a premium for quality. So the revenue per drinker might increase even as the number of drinkers declines. But volume overall is likely to keep falling. Lucas: And that's the story for a lot of industries in an aging society: you have to sell higher-value products to fewer people. The beer industry is just one example, but it's a really clear one. Luna: It's a fascinating lens through which to see demographic change. And honestly, I think this episode is a good example of why we do this show — connecting broad demographic data to something as tangible as what you might drink at dinner. Lucas: If today was useful to you, the reason we can keep making these connections without ads is listener support. If you value that, you can buy us a coffee at buy me a coffee dot com slash fexingo. It helps keep the show going, and we really appreciate it. Luna: Yeah, it's a small way to make sure episodes like this stay free and accessible for everyone who finds them useful. Lucas: So back to the beer industry — I think the key takeaway is that demographic change isn't a distant future problem. It's already reshaping what's on the shelves. For investors, watching how companies like Anheuser-Busch and Molson Coors pivot their product lines is a good indicator of who will survive and who won't. Luna: And for consumers, it means the beer aisle will look very different in ten years. Probably a lot more NA options, more light beers, and maybe fewer big-party packs. Lucas: Exactly. And that's the power of demographics — it tells you where the puck is going, not just where it's been. For The Demographics Podcast, I'm Lucas. Luna: And I'm Luna. Thanks for listening.