08 Feb 2018 3 min read

Teetotal returns: Why are millennials drinking less?

By Colin Reedie

‘Dry January’ might be over, but the number of young teetotallers is rising. So why are millennials giving alcohol a miss? And what does this trend mean for investors?


Over a fifth of those aged 25-44 are now teetotal

Official statistics show a clear long-term trend: the young are drinking less. According to the latest Office for National Statistics (ONS) report on adult drinking habits, over a fifth of the UK population aged 25-44 are now teetotal – an increase of 30% from 2005. What’s more, binge drinking has fallen by an even higher percentage. In contrast, those over 65 are actually drinking more. 

So why are millennials drinking less and is this offset by changing demographics? There are five key reasons for lower UK alcohol consumption by the young, aptly summarised by the acronym SHARE:

  • Social media – millennials are socialising less in pubs, preferring instead to share their experiences instantly
  • Health – the young are better informed, more focused on their ‘body image’ and may have witnessed alcohol-related illness in their parents or grandparents
  • Affordability – with rising student debt, the growing cost of a house deposit, and alcohol duty increases, millennials are less able to afford alcohol
  • Regulation – recent years have seen public drinking bans, public space protection orders, Challenge 25 campaign and tougher drink/drive laws
  • Ethnicity – 6% of population of the England and Wales is Muslim (Islam prohibits alcohol consumption). This number has more than doubled in the last 10 years

On the flipside, with those over 65 drinking more, the UK’s ageing population is providing an offset to the decline in young drinkers, and at the same time biasing consumption per adult towards wines and spirits. So not all areas of the alcoholic beverage market are struggling, with wine consumption still rising, aided by the demographic change.

 Beer consumption per adult is in decline across the developed world

From a more global perspective, trends in alcohol consumption across mainland Europe and North America are broadly similar to the UK. In contrast, emerging market alcohol consumption has continued to grow steadily, with Southeast Asia and Africa showing particularly strong growth in beer consumption, while China is seeing steady growth in the wine market (although Chinese beer consumption appears to have peaked.)

Opportunity brewing: Africa’s increasing share of the global beer market


 Source: ABInBev

Just as they’re being picky with their choice of beverage, investors should be selective with clients’ capital. In the Global Fixed Income team, we remain cautious on overleveraged companies with significant exposure to developed world beer consumption.

Just as they’re being picky with their choice of beverage, investors should be selective with clients’ capital

Instead, we’re more positive on selected companies with stronger balance sheets and no exposure to the ‘generic’ beer market. These companies are harnessing the move towards specialist brands, particularly in wines and spirits.

And now, as a non-millennial who’s partial to the occasional glass of specialist wine, it’s time for some in-depth research…

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Colin Reedie

Head of Active Strategies

Colin has responsibility for our Active Strategies team as well as overall portfolio management responsibilities for our Global Credit and Core Plus strategies. Colin joined LGIM in 2005 from Henderson Global Investors, where he was Head of Investment Grade Credit Fund Management. He has 25 years’ experience in bond markets, specialising in non-government debt, and he has previously worked for Henderson Global Investors, Scottish Widows and Scottish Amicable.

Colin Reedie