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It’s already been obvious for some time now that Gen Z’s drinking habits don’t match those of the generations before them. A 2023 Gallup poll found that fewer Americans aged 18-34 now drink alcohol than at any point in the past 22 years, and Billboard reported last year that music venues are suffering due to low alcohol sales. But beer sales in particular are a slightly different story, and the generation gap can only go so far in explaining them. NBC reports that the beer industry is seeing its lowest sales in a generation, and a number of factors are contributing to the struggle.

Industry group Beer Marketer’s Insights (BMI) told NBC that beer shipments have fallen to levels not seen since 1999—a timeframe that aligns rather tidily with the lifecycle of the craft beer boom. Indeed, the 2023 closure of Anchor Brewing seemed to signal the start of a newly rocky path for America’s craft beer scene, with craft sales shrinking faster than their mass-market counterparts. But the biggest players are feeling it too: “It was a tough year for beer,” BMI vice president David Steinman said.

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Ten years ago, grocery and liquor store shelves looked comparatively one-note; now there are so many more options that it’s not about choosing which beer to drink, but rather choosing which broad category of beverage to start with. Do you want to drink beer? Wine? Liquor? A canned tequila cocktail? A hard seltzer that tastes like an orange cream popsicle? Hard soda? Hard lemonade? Hard tea? Hard iced coffee? The mere existence of all these products means that each one must work harder to elbow its way into consumers’ carts.

“Some of the world’s largest soft drink and energy companies introduced sugar-forward alcohol beverages to the market, all of which are vying for the same consumer occasions as traditional malt- and hop-forward products,” Lester Jones of the National Beer Wholesalers Association told NBC via email.

However, it’s not all doom and gloom for the beer industry. The level of beer consumption in the U.S. doesn’t actually translate directly to the industry’s earnings, nor does it reflect global trends. The price of beer, NBC notes, has risen at a rate that both matches and sometimes exceeds the rate of overall inflation. On top of that, as consumers ditch the mass-market brands like Bud Light they often embrace more expensive brands—a phenomenon that led to the ascendance of Modelo Especial in 2023. These factors, coupled with strong international sales, mean that profits remain high within the beer category.

We will likely continue to see this sort of dualism play out within the beer industry throughout 2024 and beyond: Fewer drinkers and a onetime glut of microbreweries paring down to levels that better match demand, but maybe also higher profits overall as the palates of existing drinkers become more particular. Recent beverage trends like seltzer and RTD cocktails haven’t been enough to topple this dominant category, they’ve made it a lot harder for beer to stand out from the pack.