Gen Z’s decision to pass on the booze is not just another fad — it is an “existential threat,” as David Chang puts it, to the restaurant industry. In a recent interview, the Michelin-starred chef and restaurateur said declining alcohol consumption among younger diners is really packing a wallop for beverage sales — and that’s bad news for establishments that rely on booze to provide that much-needed markup (sorry, guys).
Chang just put the numbers out there: restaurants traditionally operate with a rough 70% food-to-30% beverage sales ratio. Buffing the math for profitability gets tougher when the drink portion shrinks drastically. He pointed to industry data showing beverage sales down about 18% among younger customers. With rising work, ingredient, and property costs already weighing down margins, the pressure on restaurants is building — and Chang sounded a note of caution, warning that the decline in alcohol consumption could be the tipping point.
The change is more than a financial move; it’s indicative of changing habits. And Gen Z and younger millennials, if a Gallup poll cited in the interview is to be believed, were drinking something like 9 % less alcohol between 2023 and 2025. After decades of going out to eat and snubbing so-called brown-bag syndrome, eating in is back in fashion — driven by a greater focus on health, the wellness craze, more expensive premium drinks, and less clubbing or bar hopping, all areas that previously fueled dinner-out spending and late-night eating. Chang Visits a Dive Bar. In the first clip, Chang takes viewers on a jaunt to what he refers to as “a dive bar —one of those places where if you open your cellphone everyone can use it as a flashlight.” Chang tells pal David Choe: “I’m really worried that this is going to be the type of place we’re making bars for. ”
The stakes are high for the restaurant industry, insiders say. Not only does the decline in drink revenue cut into profits, but it also forces eateries to increase food prices or skimp on labour and margins to stay in business. Chang articulated this blunt practical reality: “Food needs to get more expensive… but that sounds terrible… because it’s already expensive.” “We’re on the edge of what is probably going to be a tsunami of closing businesses,” Food Industry Association CEO Phil Kafarakis told me.“This whole thing is really becoming a tsunami sort that really doesn’t look like it’s going to slow down.”
What this could mean for consumers and businesses alike is that dining out may start to feel different. Restaurants looking to counter declines in drink sales may rely more heavily on higher food checks, pricier dishes, tasting menus, or fees for atmosphere. Others might reduce late-night service or shrink the size of their bar areas. At the same time, it may mean that dinner-out occasions among younger diners will become more curated, pricier, or less spontaneous.
There are also pockets of opportunity. Drinks companies are repositioning their portfolios toward mocktails, non-alcoholic cocktails , and alcohol-free dining experiences aimed at younger consumers. Some restaurateurs are testing “dry bars” or concept restaurants focused on food-first experiences, not beverage-first revenue. But Chang’s warning remains: Without changes in the core economics, the industry-wide dependence on beverage margins is a structural weakness.
Gen Z’s reduced alcohol consumption may seem like a lifestyle choice — but for restaurants, it could signal something more structural. David Chang’s remarks weren’t just controversial — they were a wake-up call that the decades-old business model at the top of the dining world may be in line for a serious recalibration.
