For decades, alcohol and cigarettes have been the go-tos for taking the edge off life’s chaos. With Gen Z opting out of these vices, Big Alcohol and Big Tobacco are scrambling to stay relevant in a world where wellness is the new rebellion.

Every once in a while, I see a trend on TikTok that makes me question the general trajectory that humanity is on. The latest example is something called “rawdogging” flights. It sounds like a filthy innuendo, but the reality is far more dull: it means that people (usually young people) are choosing to sit through long-haul flights with zero distractions or comforts. No movies, no naps, no music, no books, no snacks – sometimes not even water. Just pure, unfiltered existence, staring at the back of a seat for 7 hours or more. For Gen Z, rawdogging is a flex, a test of mental endurance, and (to the horror of airline marketing teams) a growing badge of honour.

The first time I saw a TikTokker bragging about rawdogging an overnight flight, I was confused about why anybody would choose to do something like this – and why it was being applauded. But then I thought about another trend that’s become associated with Gen Z, and two circles converged to form an unexpected Venn diagram.

Think about it: this is the same generation that is making headlines for drinking and smoking substantially less than their predecessors, despite the fact that they’re living through one major event after another. Take your pick – a global pandemic, massive geopolitical unrest, a housing crisis, skyrocketing costs of living, massive job disruption caused by AI – and that’s all just in the last five years. To be fair, no world wars though. We will firmly hope it stays that way!

Past generations reached for a drink or a cigarette (or a Prozac) to take the edge off stress, social anxiety, or existential dread in the same way that most of us would tune into on-flight entertainment. But Gen Z? They’re essentially rawdogging life – no alcohol, no cigarettes, no chemical crutches. Instead of numbing out, they’re opting in: cold plunges over cocktails, breathwork over bar tabs, functional mushrooms over a pack of Marlboro Reds.

For the alcohol and tobacco industries, this shift is a crisis. After decades of selling their products as the ultimate coping mechanisms, they now have to pitch to a generation that sees water bottles as aspirational (Stanley cups, anyone?). So what does this mean for the future of these industries? And how long until Big Tobacco pivots into smoke-free meditation retreats?

What do the numbers say?

For decades, drinking (often to excess) has been a rite of passage into adulthood, especially in Western cultures. From sneaking cheap booze as teenagers to using alcohol as a social lubricant well into adulthood, previous generations have treated drinking as a fundamental part of fun, friendship, and even professional networking. Think of weddings, work functions, nights out on the town – few social settings have been complete without a drink in hand.

But Gen Z is rewriting that script. They’re drinking less, drinking later, or not drinking at all, and the numbers prove it. The UK’s largest recent study on drinking habits found that in 2019, 16-to-25-year-olds were the most likely of all generations to be teetotallers, with 26% steering clear of alcohol entirely. In the US, the number of college-age Americans who don’t drink jumped from 20% to 28% in just a decade. Youth drinking rates have also plummeted across Southern hemisphere countries like Australia and New Zealand. During lockdown, 44% of Gen Z Australians reported cutting back on alcohol, more than double the rate of any other generation. In New Zealand, binge drinking among young people has dropped by more than half since 2001, and the downward trend hasn’t slowed.  

And that’s just alcohol. Cigarettes are facing an even steeper fall from grace.

According to Gallup’s latest poll, smoking rates among American adults have dropped sharply, and Gen Z is leading the decline. Back in the early 2000s, 35% of Americans under 30 admitted to smoking cigarettes. Today, that number has plummeted to just 6%.

While Gen Z is the least likely generation to smoke cigarettes, they’re the most likely to vape. Gallup’s data shows that 18% of 18-to-29-year-olds use e-cigarettes, compared to just 1% of those 65 and older. In other words, while the classic cigarette is becoming a relic of the past, the nicotine habit itself isn’t exactly disappearing; it’s just changing form. Still, the total number of nicotine users under 35 today is lower than it was 25 years ago. 

Why is this happening?

There’s no single reason why Gen Z is turning away from drinking and smoking; it’s more like a combination of growing up in a high-stress and always-on world, having more information at their fingertips, and being generally more risk-averse than their predecessors.

They’ve seen the warnings, heard the horror stories, and don’t need to learn the hard way. With endless research just a Google search away, entire TikTok communities like #SoberTok, and open conversations about addiction and mental health, Gen Z has a far more nuanced understanding of what alcohol and nicotine do to the body and mind.

It’s not just about physical health – many simply don’t like the idea of being drunk. A 2019 Google study found that 60% of UK Gen Z associate drinking with a loss of control. Unlike past generations, who could afford the occasional night of debauchery without permanent consequences, Gen Z knows that every questionable decision can be documented and broadcast online in seconds. 49% admit that their online image is always in the back of their mind when they’re out drinking. And with increasing reports of drink-spiking, especially among young women, the idea of a carefree night out feels more like a gamble than a good time.

So if Gen Z aren’t spending their disposable income on booze and cigarettes, then where is that cash going? You guessed it: wellness. According to McKinsey’s latest Future of Wellness research, Gen Z and millennials are leading the charge when it comes to spending on wellness, outpacing older generations in everything from fitness to mental health. The survey, which polled over 5,000 consumers across China, the UK, and the US, found that Gen Z is particularly drawn to wellness purchases that focus on appearance and overall health. They’re also shelling out more than their elders on mindfulness-related products like meditation apps, therapy sessions, and wellness retreats (which, given their well-documented mental health struggles and the state of the world in general, isn’t exactly shocking).

56% of Gen Z consumers in the US say fitness is a “very high priority”, compared to just 40% of US consumers overall. And it’s not just about looking good now: young people are already investing in preventative health solutions, caring about longevity and healthy aging in ways that were once reserved for Boomers browsing the supplement aisle.

Raise a (water) glass to tomorrow

At first glance, the decline of drinking and smoking might seem like a problem only for alcohol and tobacco companies. But for investors, it’s a reminder that market dominance is never a guarantee, especially when consumer priorities are shifting. A company might look solid today (and for fifty years leading up to today), but if its core audience is aging out and the next generation isn’t buying in, those numbers won’t stay impressive for long. Does that verse sound familiar, De Beers?

Smart investors don’t just look at where a business is now, they look at where it’s going. Who is the future customer? What pressures are shaping their choices? And most importantly, is the business evolving to meet them where they are? Gen Z has made it clear that they’re swapping their party nights for pilates, thank you very much. Businesses that see this shift as an opportunity, rather than a crisis, will be the ones still standing in the decades to come.

Editor’s note: perhaps that position you’ve got in British American Tobacco or AB InBev isn’t so “defensive” after all, is it? I don’t hold a stake in either company for all the reasons that Dominique set out in this excellent piece.

About the author: Dominique Olivier

Dominique Olivier is the founder of human.writer, where she uses her love of storytelling and ideation to help brands solve problems.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting. She now also writes a regular column for Daily Maverick.

Dominique can be reached on LinkedIn here.