Canada is undergoing a quiet but profound transformation in its relationship with alcohol. A sustained, multi-year decline in consumption is reshaping the national market, driven by a powerful combination of economic pressure, shifting social norms, and new alternatives like legal cannabis.
The Numbers Tell a Clear Story of Decline
The latest annual report from Ontario’s LCBO provides a stark portrait of this new reality. Total alcohol volumes sold through the provincial monopoly fell by 3.9% last year, dropping from 622.7 million litres to 598.4 million litres. This decline is not due to fewer store visits—transactions actually increased by over 2%—but because customers are consistently buying less each time. This pattern is the hallmark of a moderation trend: stable frequency but shrinking quantity.
The retreat is broad-based across traditional categories. Beer, the long-standing anchor of the Canadian market, saw provincial volumes fall by 7.1% in the 2023–24 period. Wine consumption in Ontario dropped by 5.9% in volume, representing nearly eight million fewer litres. Even premium wines were not immune; the Vintages segment declined by 5.3%, indicating consumers are trading down in response to high inflation. Spirits also experienced a 4.3% volume decrease, partly due to a shift toward smaller, more affordable formats.
A National Trend, Not a Provincial Blip
What makes this shift remarkable is that it is a coast-to-coast phenomenon, not isolated to Ontario. Data from across the country confirms a national retreat from alcohol.
In British Columbia, beer consumption has fallen by nearly 9% over two years, with wine sales down over 4%. Alberta recorded a 5.4% drop in beer sales last year. Atlantic Canada is following suit: Nova Scotia’s NSLC reported a 3.6% decline in total alcohol volume, including a 6.9% reduction in beer. Even Quebec, historically Canada's most resilient wine market, is cooling, with the SAQ reporting a 2.3% decline in total litres sold.
Statistics Canada confirms this is a sustained national shift. Alcohol volumes declined by roughly 3.3% nationally last year, marking the third consecutive year of falling consumption. Canada has not seen a three-year slide of this magnitude in the postwar era, signaling this is a structural change, not a temporary blip.
The Forces Driving Canada to Drink Less
Experts point to three primary forces behind this transformation. First, moderation has become a powerful social norm, particularly among younger Canadians. Generation Z drinks 20 to 30% less than millennials did at the same age, a profound demographic shift that will reshape the market for decades. Legislative pushes for warning labels are following a trend that consumers are already embracing independently.
The second driver is intense economic pressure. With elevated food inflation and rising housing costs, disposable income is constrained. The LCBO report explicitly notes a consumer pivot toward lower-priced brands and smaller formats, classic signs of down-trading in a tough economy.
The third factor is the explosive growth of ready-to-drink (RTD) beverages. While traditional categories struggle, the RTD segment in Ontario surged by 9.5%, adding $64.5 million in sales. These lower-alcohol, flavour-focused drinks now command roughly 63% of all spirit-based volume sold in the province. Their success represents a reallocation of a shrinking alcohol "budget" toward products perceived as more convenient and lifestyle-friendly.
A fourth, often-overlooked element is legalized cannabis. Since 2018, cannabis has become a credible substitute for many consumers, particularly younger adults seeking relaxation without calories, hangovers, or the growing social stigma associated with alcohol. Provinces with higher cannabis retail density have seen some of the most pronounced declines in alcohol sales.
Implications for Industry and Policy
This recalibration of Canada’s alcohol market demands a strategic rethink from all stakeholders. Government revenue models built on steady volume growth must adapt. Restaurants and bars will feel the impact as high-margin drink sales soften. Producers reliant on traditional beer and wine categories face pressure to innovate or risk irrelevance.
For policymakers, the sustained decline complicates public health planning and revenue forecasting for provincial monopolies. The market is unmistakably moving toward lower-volume, higher-margin consumption, with a pronounced emphasis on wellness and conscious choice.
Canada is entering a new chapter where consumers are drinking less, thinking more, and choosing differently. The data presents an undeniable truth: moderation is no longer just a movement—it's a dominant market signal that the entire industry can no longer afford to ignore.