European alcohol sales decline as consumers embrace functional, health-focused beverages – Circana 

EU – Alcohol sales in European retail stores have fallen by 1.7% over the past year, according to a new analysis by Circana titled “The Silent Revolution of Beverages.”

The decline represents 285 million fewer liters sold and a €1 billion drop in value compared to the previous year, underscoring a major shift in consumer preferences.

The report, which covers the period up to June 2025, highlights that while consumption in hospitality venues such as cafes, restaurants, and pubs remains stable—about 50 billion drinks served annually—retail trends show a clear move away from traditional alcoholic beverages. In their place, non-alcoholic and functional drinks are experiencing significant growth.

The out-of-home beverage market in Europe is now valued at around €157 billion, reflecting consumers’ readiness to spend on drinks that deliver more than just refreshment.

This summer, visually appealing and health-oriented beverages gained momentum, with options such as ube lattes, matcha iced teas, homemade lemonades, and cold-fermented beers standing out among consumer choices.

Functional beverages designed to improve concentration, reduce stress, or aid digestion are especially popular with younger consumers aged 18 to 34. This demographic, heavily influenced by wellness trends and social media, actively seeks products with bold colors, unique ingredients, and lifestyle appeal.

Edurne Uranga, Vice President of Foodservice Europe at Circana, noted that beverages have become personal statements for young Europeans, representing not only refreshment but also identity, wellness, and social media presence.

The decline in alcohol is also evident in hospitality venues, where sales have dropped by 6%. The traditional “rosé all day” culture is increasingly being replaced by kombucha gatherings and premium non-alcoholic options. This shift reflects consumers’ growing prioritization of healthier choices and changing lifestyle trends.

Sugar consumption has also come under scrutiny. Modern soft drinks made with natural sweeteners such as stevia, cane sugar, or fruit juice are gaining favor, with many incorporating prebiotics, vitamins, and gut-health benefits.

Sugar-free drinks are leading the market as consumers, including those using GLP-1 medications for weight management, reduce their sugar intake. Public support for sugar taxes is also on the rise, with 41% of Europeans in favor of such measures.

Innovation has become a defining driver in the European beverage sector. Thirty percent of consumers say innovation is their main motivation for trying new brands. In the EU6 countries, innovative food and drink launches accounted for 5.1% of total sales value in the past year.

Energy drinks are also expanding their influence. Despite being consumed by only one in three Europeans, their sales in restaurants and bars have grown 9%, surpassing soft drinks and juices. Retail sales of sports and energy drinks have risen as well, with consumer spending up 7.7%, units sold increasing 4.3%, and volume growing 3.2%.

At-home experiences are reshaping engagement strategies, with wine tastings, cocktail kits, and barista-style beverages creating fresh opportunities for retailers and brands.

Ananda Roy, Senior Vice President of Global Leadership & Strategic Insights at Circana, emphasized that blurring category lines has become crucial, as alcohol brands move into low- or no-alcohol options and soft drink brands expand into traditionally alcohol-dominated spaces.

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