Amanda Lybeck, 37, is giving up alcohol for all 12 months of 2026. A year ago, the Maple Valley, Washington, resident completed Dry January — the trend of going sober for one month — for the first time as a way to support her fitness journey.

It's since gotten easier, she said, as her co-workers participate and an increasing number of businesses list nonalcoholic alternatives on their menus.

It has definitely become a lot more normalized," Lybeck said.

Fewer people across the country are choosing to imbibe booze. They're not only motivated by health and wellness goals but also by the ongoing economic crunch squeezing their wallets. That spells bad news for the alcohol industry: a saturated market competing for a shrinking pool of consumers.

"The alcoholic beverage industry right now is in a state of panic," said Frank Marcus, president of the Montreux Group, a consulting firm for the sector.

Among the drinking population, some are growing choosier about where they spend their dollars. They’re pitting the desire to save their coins against a moral obligation to pick producers who share their values, lift up their communities and proudly embrace their identity or heritage.

It’s proving to be an opportunity for small businesses — and consumers are responding.

When Lybeck drinks, she aims to support local brands or companies with ethics that align with her own.

"Flavor profiles and that kind of thing are important," Lybeck said, "but I'd be much more inclined to support a business that did have an interesting or diverse story behind them, for sure."

Generational changes

Amid challenges, some business owners are trying to stand out with uncommon products.

Rainbrew in Woodinville, Washington, is one of the country's few rice wine breweries, alongside Hana Makgeolli in New York and JS Brewery in Maryland.

"I don't think we have a lot of trouble setting ourselves apart" from other beverages, said Sophia Jung, 27, co-owner of Rainbrew.

The idea for the business was sparked by her mother, Jooyun Jung, 59. She spends half of each year in Korea. There, she first tried the Asian nation's traditional alcohol in 2017.

Back in the U.S., Jooyun couldn't find it. So her son, Peter Jung, 31, traveled to Korea to learn how to make it himself in 2021.

He and Sophia, who are third-generation Korean Americans from the Seattle suburb Bellevue, opened their production facility with their mom in 2023. Their products include various types of takju, or rice alcohol, and low-alcohol rice wine, makgeolli.

The Jungs hope to introduce the public to the rice alcohol at their Woodinville tasting room, which opened last year.

Many customers are already familiar with soju, another Korean spirit. Sophia said Rainbrew is also benefiting from the American hype around Korean culture, including K-pop music and K-beauty skin care products.

Peter said that his family makes their beverages traditionally and in very small batches. They use wild fermentation, which yields probiotic qualities in the alcohol. No sulfites are added.

"Our product checks a lot of boxes for this new generation of drinkers," Peter said.

According to Montreux Group's Marcus, that appeal to younger demographics is crucial for success in the industry.

"Different generations are drinking differently," he said.

Marcus, who teaches an alcoholic beverage distribution course at Western Washington University, pinpointed how consumer behaviors are changing: Baby boomers and Gen X are more concerned about health as they age. Though they make up the highest per capita spending on alcohol, they’re drinking less.

That means millennials and Gen Z are the new focus.

Millennials, who hold the largest spending power, choose their products selectively, Marcus said. Gen Z may lack discretionary income, but they drive the trends.

Washington's alcohol sector is competing against the cannabis market and even coffee culture for consumers' extra cash, Marcus said. The state's high cost of living also affects spending.

'We definitely see a downturn'

With drinking habits in flux, some business owners are attempting to adapt.

And nationwide, 54% of adults say they drink alcohol — an almost 90-year low, analytics and advisory company Gallup reported in August.

The downtrend is largely driven by health concerns. More than half of Americans, 53%, now believe moderate drinking hurts their health, per Gallup, and young adults are particularly averse to it.

Recent studies have found that any amount of alcohol consumption exacerbates the risk of cancer.

To drink or not to drink is a personal decision. But for businesses, Dry January can be tough, according to Caitlin Braam, founder and CEO of Yonder Cider. The company has two taprooms in Seattle's Ballard neighborhood and Cashmere, Washington, along with a production facility in Wenatchee.

"We definitely see a downturn in January," she said.

Wavering demand compounds with other pressures, including rising costs for labor, ingredients and supply chain needs.

She raised the shelf price on four packs of 16-ounce cans to $13.99 from $11.99 in 2022. Since then, Braam has refused to hike the cost because she doesn't want to make her product unaffordable for price-conscious consumers.

Issaquah, Washington, resident Aaron Pinto, 47, is someone who’s keeping an eye on dollar signs.

"Everything's about $3, $4 more expensive over the past four, five years," he said. "It does have an impact."

While he appreciates Pacific Northwest breweries, such as Mac & Jack's, Pinto sometimes considers buying Coors Light over a more expensive six-pack of local beer.

He plans to spend next month sober. It helps him "save a few more dollars from not going out Friday night," Pinto said, and it serves as a reset.

At Yonder Cider, Braam has also embraced the start of the year as a time to refresh. She caters to visitors — sober clientele included — with events like cold plunge and sauna sessions.

Braam remains enthusiastic about the direction in which her sector is moving.

Last year, the U.S. craft cider market was worth $1.85 billion, per market research company Intel Market Research. It's expected to hit $3.25 billion by 2032.

Washington counts as a national leader in per capita demand, per capita consumption and overall cider volume, according to global drinks data and insight provider IWSR.

Overall, "cider is having this resurgence," Braam said.

'A deeper rooted meaning'

Because of industry hurdles, standing out from the competition can serve businesses well. The reason they persist in the sector day after day can resonate with younger clientele.

"The brand has to have a deeper rooted meaning because the next generation, they are looking at the why," Marcus at Montreux Group said.

Until recently, consumers interested in supporting local — as local as this land’s original Indigenous stewards — couldn’t find options on the market.

That’s because an 1834 law forbade tribes from distilling. The Confederated Tribes of the Chehalis Reservation fought to repeal it, lobbying to overturn the Indian Trade And Intercourse Acts. In 2018, then-Washington Rep. Jaime Herrera Beutler introduced a bill to do just that — and it was signed into law by President Donald Trump later that year.

And so the Chehalis Tribe’s Talking Cedar, a restaurant, brewery and distillery in Thurston County's Grand Mound, was born. Brewing started in 2020 and distilling followed in 2021.

"We're on sovereign land here," said Matt Hofmann, general manager of Talking Cedar. "The tribes have been unfairly kept from participating in this industry."

Now, they're producing brews like Chehalis Light and spirits such as Kayak Gin, dubbed "the first legally distilled spirit made on Native American land."

Customers searching for a true taste of the Pacific Northwest can turn to Talking Cedar. Its drinks feature culturally important ingredients, including mountain yarrow and cedar tips, said Hofmann, who is not Native.

"This is the Chehalis Tribe," said Hofmann, 36. "We're from the Pacific Northwest, and we want our products to reflect that."

However, consumers who want more will have to wait.

The tribes are encountering more red tape as they seek approval from the U.S. Food and Drug Administration to use other Indigenous ingredients — a process that can take as long as two years, Hofmann said.

Changes are afoot in the industry, which is staggeringly homogenous.

For example, almost 94% of brewery owners in the U.S. identified as white in 2021, compared with 0.4% who were Black and 0.4% who were Native American and Alaska Native, according to the Brewers Association. Close to 76% identified as men.

But “the American beverage alcohol consumer is increasingly BIPOC and female,” Bart Watson, president and CEO at the Brewers Association, wrote in a report about the data. BIPOC refers to Black, Indigenous and people of color. “That shift is ongoing and will likely continue going forward.”

The U.S. population remains more diverse than the sector supplying its alcohol. Business owners from marginalized communities find meaning in providing that representation.

"I have been the only female in a room for a really long time," Yonder Cider’s Braam said. "It's not new to me, but I wasn't seeing people like myself owning businesses like I have now."

Just a few years ago, Sidney Rice, 39, remembers being one of the few Black winery owners in the state, joining the ranks of Frichette Winery in Benton County's Benton City and LaShellé Wines in Woodinville.

Less than 1% of the country's wineries are Black-owned, according to Gitnux Market Data.

Rice and Tim Lenihan, 45, first publicly released wine through their brand, Dossier Wine Collective, in 2022. Washington boasts several wine-touring regions, including Woodinville and the Walla Walla Valley, where Dossier has tasting rooms.

Rice and Lenihan are relatively new to the industry. Rice played for the Seattle Seahawks until 2014, and Lenihan works in real estate.

Now, Rice is watching his new sector slowly diversify.

"I enjoy what I'm doing," he said, "and I also understand the impact.

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