Jack Daniel’s Parent Company Blames Weight Loss Drugs, Cannabis and Gen-Z for Plummeting Alcohol Sales

(Photo: Ying Tang/NurPhoto via AP).

Last week, shares of beverage group Brown-Forman plummeted by more than 18% after the company forecast a decline in annual revenue. In addition to tariffs and inflation, the losses have been attributed to a bevy of market trends that are poised to challenge the liquor industry at large over the next few years.

Brown-Forman reported that its net income dropped to $146 million for the fiscal fourth quarter, down from $266 million a year prior. Some of its biggest losses came by way of the company’s tequila (Herradura, El Jimador) and ready-to-drink portfolios, which declined by 14% and 6%, respectively. Meanwhile, demand for the company’s whiskey products, including brands like Jack Daniel’s, Woodford Reserve and Old Forester, reportedly plateaued.

In an earnings call with analysts, Brown-Forman CEO Lawson Whiting blamed the trend, at least in part, on what he called the “same big three” — weight loss drugs, cannabis use and declining demand among Gen-Z consumers.

“We’ve been saying that for 1.5 years now. And I know on the sell-side that the world seems to be a little bit split on the extent of the pressure that it’s putting on our category. We’d be naive if we didn’t say that there isn’t some pressure coming from those,” Whiting said.

Whiting isn’t the first to call out these headwinds, and he certainly won’t be the last.

Weight-loss drugs like Ozempic and Wegovy have taken on an almost boogeyman status within the alcohol industry since their widespread adoption in 2021. These products, typically different brand names for the same prescription drug, semaglutide, have been linked to reduced cravings not only for alcohol but also for drugs, nicotine and gambling. According to a study cited by UCLA Health, 1.7% of people in the U.S. were prescribed semaglutide medication in 2023 — a 40-fold increase from just five years prior.

Industry regulars have been quick to take notice. Terry Smith, a prolific investor occasionally referred to as the “English Warren Buffett,” cited the trend as his reasoning for dumping Diageo stock earlier this year.

The impact of cannabis use and legalization is a different bucket of worms. In 2022, New Frontier Data reported that roughly 69% of young adults aged 18 to 24 said that they prefer cannabis to alcohol. Other studies paint a similar picture. A report published in the same year alleged that nearly half of cannabis consumers are replacing some amount of their alcohol consumption with marijuana. Others have reported that daily cannabis use is nearly three times greater than daily alcohol use among Gen Z consumers.

It’s impossible to make conclusions from these statistics just yet. Unlike weight-loss drugs, which can be narrowed down to prescription numbers, cannabis use falls entirely into self-reporting. It’s also worth noting that many of the most widely circulated studies have been penned by dedicated cannabis research firms.

In an earnings call, the Brown-Forman CEO added that “geopolitical volatility,” “currently unknown tariffs” and the “lower non-branded sales of used barrels” will pose broader difficulties for the company in 2026.

It appears that the conglomerate has already moved fast to make up for losses. On Monday, The Spirits Business reported that Brown-Forman sold its shuttered Louisville cooperage to the Independent Stave Company for $13.66 million. The facility, which produces more than 2,500 barrels daily, was first acquired by Brown-Forman in 1994.