Scotch whisky is of course a cornerstone of the country's economy, supporting approximately 41,000 jobs across some 154 operating distilleries. The industry generates some £5.3 billion of economic value in Scotland, making it the most productive sector after energy.
A significant share of the industry's employment is in rural and island communities, where distilleries are frequently the largest local employer, and whisky tourism is a sizeable driver of local income, influencing hospitality, transport and retail. Distilleries are claimed to be Scotland's most-visited tourist attraction collectively, attracting circa 2.7 million visits in 2024 and generating around £85 million in direct visitor spend.
The combination of employment, export earnings, tourism focus and cultural symbolism makes the current pressures on the industry particularly concerning, even at a national level.
Full-year exports to the United States, the industry's largest market by value, fell by 4% in 2025, to circa £933 million, while global exports also declined, albeit more modestly. Trade barriers – particularly US tariffs – were a major contributor to that decline, compounding rising operational costs and a tax and regulatory burden labelled as unsustainable by the Scotch Whisky Association.
This picture has shifted, however. From 24 July 2026, US tariffs on Scotch whisky were removed entirely, following the agreement reached during His Majesty The King's April state visit. The Scotch Whisky Association has called it "welcome news," with Scotch's most valuable global market now open tariff-free again. It follows a similar reduction in India, where tariffs have fallen from 150% to 75% immediately under the new UK-India trade deal, with a further gradual reduction to 40% over the next ten years. Whether this translates into a genuine export recovery, though, is a separate question from the structural, generational shift in how whisky is consumed.
Several distilleries have already been reducing jobs, production and visitor facilities.
Over and above, there is little doubt that consumer drinking habits are changing – and, in the process, compounding the issue.
The associated trends may not simply be around a decline in drinking. Research from BGS Kantar determined that households in the UK, the US, India and Mexico were consuming spirits more frequently between 2024 and 2025. More likely, people are drinking in smaller measures, and buying cheaper bottles, with premiumisation losing ground to flavoured drinks, experiential occasion drinks and ready-to-drink formats favoured especially by millennials and Gen Z drinkers. Given Gen Z and millennials now represent circa 50% of the world's population, this is not something to be ignored. Indeed, Diageo has responded by investing more heavily in Johnnie Walker special editions and its blackberry-flavoured Crown Royal Canadian Whisky.
Other export markets tell a similar story: Spain's whisky market compressed at a compound annual rate of 3.4% between 2017 and 2022, as consumers turned to gin and wine, while in Asia-Pacific, export value fell by 8.3% in 2025 even though volumes were broadly stable, indicating a movement towards lower-cost brands rather than collapsing demand. India has acted against the trend, growing its export value by 15% to become Scotch whisky's third-largest global market. However, this is a rare cause for raising a glass.
Against this backdrop, the industry is lobbying for greater tax fairness and can take some comfort from an anticipated rise in domestic demand. But is there another route to long-term growth?
Two very public trends may point to the answers the industry may be seeking: the boom in ready-to-drink (RTD) products, and the runaway success of Aperol Spritz.
The global alcoholic RTD sector is valued at somewhere between $18 billion and $44 billion. Ready-to-drink and easy-to-use formats align well with the way Gen Z and millennials drink – largely occasion-focused, casual and with low effort. Spirits in cans, for example, can travel easily into new markets and new occasions such as picnics and outdoor events. Portion-controlled servings with a defined ABV fit comfortably with the broader drink-less-but-better motivations of Gen Z and millennials.
Furthermore, many producers make RTDs locally thereby avoiding import tariffs. Interestingly, the RTD sector is one where premiumisation is less affected: most new launches are positioned as premium rather than cheap, which makes RTD a genuine premium format as well as an accessible entry point. Flavour innovations can lower barriers further, with spirits of this type growing faster than traditional categories.
Whilst none of the above necessarily indicates people are drinking more, it does highlight a shrinking, more selective, tariff-affected audience whose loyalty relies less on single-brand allegiance, and more on convenience, moderation and format flexibility. Canned versions of popular cocktails embody the shareability and low-commitment appeal that has driven the success of drinks such as Aperol Spritz – a wine-based cocktail of Prosecco, Aperol and soda water – which has gained social media viral popularity. They are colourful, portable, easy to photograph (for social media), and require no skill to make successfully. For an industry built on craft, heritage and patience this is a very different value proposition, and one the Scotch whisky sector needs to tackle.
To distil this complex issue to a simple question: how does the industry adapt to this changing market landscape?
Gen Z and millennial demand for whisky is not linear and sectors that misread structural habit changes as trends are likely to lose more than sales, especially in the case of Scotland where jobs and communities are at real risk.
Gen Z is drinking less than any previous generation, and prioritising experience, authenticity and personal values over heritage. This is a generation that wants to know what a brand stands for as much as how it tastes. Producers that continue to market to this audience in traditional ways are likely to end up following a shrinking and increasingly indifferent audience.
However, opportunity exists: RTD growth and the Aperol Spritz phenomenon are proof of that, and indicators that this opportunity splits into two segments.
The first segment is premium, experiential drinkers. Millennials are estimated to be responsible for a significant share of the ultra-premium whisky market despite drinking less overall. When they choose to drink, they will typically trade up, seeing the choice as an experience rather than a routine purchase. Younger drinkers are also more likely to research before buying. This means Scotch whisky brands must communicate genuine value rather than leaning heavily on heritage alone. This plays directly to Scotland's strengths in provenance, craft, and location, but the story must be told in a way that resonates rather than simply invoking tradition.
The second segment is casual, convenience drinkers. Bacardi Breezer and Smirnoff Ice have both been relaunched to attract Gen Z, whilst cask ale has seen a circa 50% rise in popularity amongst 18-24-year-old pub-goers. It could be argued that whisky's traditional rituals and symbolism, once its greatest assets, may have held it back from gaining the same audience.
Against this backdrop, the scale and nature of the challenge the industry faces become evident. Winning both premium and casual drinkers is hard: young consumers face a wide range of influences, fragmented routes to purchase and consumption, and the message for a casual drinker may look nothing like that for a brand justifying its premium price. Any brand that tries to be all things to all drinkers – heritage-driven yet a session drink, exclusive and accessible – risks becoming confusing for everyone and relevant for no one.
If attraction isn't difficult enough with Gen Z and millennials, retention is possibly even harder: these generations are often willing to leave, with their feet and digital wallets, any brand that ceases to feel relevant and authentic. Whisky producers must become attention-seekers – constantly earning the right to be consumed by these groups, rather than capturing attention once and simply maintaining the connection.
The whisky industry is critically important to Scottish jobs, export earnings, rural communities and sense of national identity, but it is facing difficult times. If we accept that the consumption habits of millennials and Gen Z are structural rather than fleeting trends then, given the consumer scale they represent, the industry cannot afford to treat this as merely a marketing challenge. These groups may determine how much of the industry, and the communities dependent on it, will survive and thrive in the longer term.
Identifying and pursuing a clearly defined audience, with values that support the lives they lead, may be the most sensible place to start.
It will not solve tax policy or geopolitical uncertainty on its own, but it could give a new generation a genuine reason to engage with whisky and give the industry that means so much to Scotland the shot it needs.