A top restaurateur has a plea for Gen Z: please drink up.
Momofuku founder David Chang says America’s youth isn’t drinking alcohol in the same way as earlier generations, and it has become the “real existential threat” to the restaurant industry.
“Kids just don’t drink anymore,” Chang said in an interview with TBPN talk-show hosts John Coogan and Jordi Hays this week.
“They are never going to know what it is like to wake up at 3 p.m. in the afternoon and be like: ‘Shit, I left my credit card in that bar.'”
Gen Z not getting drunk is a problem for restaurants, he said, where the sales ratio is generally about 70% food to 30% beverages. “Something is going to give when you are down 18% on beverage sales,” he said, citing average sales numbers across the restaurant industry.
According to a Gallup survey from August, the percentage of young adults — Gen Z and some millennials — who say they are drinking alcohol fell by 9% between 2023 and 2025.
There isn’t a single clear reason this is happening. Though the growing focus on health and wellness and the rising cost of alcohol both play leading parts.
Gen Z isn’t only taking a different approach to drinking, it’s also shunning nightclubs and bringing back other trends such as communal dining and supper clubs.
The restaurant industry bubble
The decline in alcohol consumption is concerning for an industry that’s already feeling the heat from a cash-strapped consumer eating out less to save money.
“Consumer sentiment is in a very bad place,” Phil Kafarakis, CEO of IFMA, The Food Away From Home Association, told Business Insider.
Restaurants are grappling with rising ingredient costs, higher labor costs, and fickle consumers.
And with declining beverage sales, they are going to need to recoup costs elsewhere.
“I don’t have an answer,” Chang said. “Food needs to get more expensive,” he added, “but that comes across as terrible… because it’s already expensive.”
Kafarakis expects there to be somewhat of a reckoning as we head into the new year, with more restaurant closures coming.
“This whole thing is really becoming a tsunami of sorts that really doesn’t look like it’s going to slow down,” Kafarakis said.
