Altria, Marlboro-maker and parent company of Philip Morris USA, last week announced its intention to sell 35 million shares of Anheuser-Busch InBev, the makers of Bud Light and Michelob. The deal was worth roughly $2.2 billion at a $61.50 share price. AB InBev agreed to buy $200 million of ordinary shares directly from Altria, per the SEC filing outlining the sale.

“We believe this is an opportunistic transaction that realizes a portion of the substantial return on our long-term investment,” Altria CEO Billy Gifford said in a press release. “Over the decades of our ownership, the beer investment has provided significant income and cash returns and supported our strong balance sheet.”

Prior to the sale, Altria owned about 10% of AB InBev’s shares; the tobacco giant will have about an 8% stake in the beer conglomerate after the deal. Altria expanded its ownership of AB InBev in October 2016, a month after AB InBev announced the $103 billion takeover of SABMiller. The brew union accounted for one-third of all worldwide beer sales at the time.

But eight years on, AB InBev’s hold on the beer industry has wavered. Its shares dipped nearly 5% on Thursday following the sale’s announcement. Though it posted a healthy 7.8% revenue growth for the 2023 fiscal year, AB InBev’s volumes faltered 1.7%, in part due to the lasting impact of conservative consumers’ Bud Light boycott following the brand’s brief partnership with transgender influencer Dylan Mulvaney last year. As of August, Modelo eclipsed Bud Light in sales, and Molson Coors reported a 9.3% sales growth last quarter, which it partially attributed to “shifts in consumer purchasing habits.”

AB InBev did not immediately respond to Fortune’s request for comment.

While AB InBev’s competition has won the battle against Bud Light, the entire beer industry appears to be losing the beverage war. Constellation Brands—which owns Modelo—Boston Beer Company, and Heineken all posted underwhelming profits last quarter, with demand for beer dipping due to inflation-induced price increases. The cost of beer at home has increased 3% in the last six months, according to the Consumer Price Index.

The beer industry must also confront the changing tastes of younger generations, who are increasingly turning away from alcohol in favor of mocktails, alcohol-free beer, and marijuana. Non-alcoholic beer company Athletic Brewing saw a 13,000% increase in revenue from 2018, when it was founded, to 2021. Gen Z reports drinking 20% less alcohol than millennials and cites health concerns as a reason for cutting back.

Big tobacco is shrinking

Beer is only one half of Gen Z’s more ascetic lifestyle, and big tobacco has felt the hit from changing trends as well. Though Altria narrowly beat fourth-quarter adjusted profit expectations, it reported a 7.6% dip in domestic cigarette shipment volumes and 3.3% decrease in net revenues for smokable products.

Cigarette sales across the industry have tanked, dropping from $190.2 billion in 2021 to $173.5 billion in 2022, according to an October 2023 Federal Trade Commision report. The popularity of cigarettes has fallen alongside sales, with a near-record low of 12% of U.S. adults reporting smoking and 76% calling tobacco “very harmful” in an August 2023 Gallup poll.

While Altria hopes to cash in on the AB InBev shares, it has also pivoted to smoke-free products such as vapes and nicotine pouches to prop up waning tobacco sales. Altria expanded its portfolio of smoke-free products in June 2023 after the acquisition of e-cigarette company NJOY Holdings, Inc. 

“Our aspiration is to compete in the international innovative smoke-free markets and enter into non-nicotine categories,” Altria’s earnings report said.

The expansion of products beyond cigarettes is part of Altria’s changing messaging towards harm reduction, promoting products less harmful than combustible tobacco. But the swivel also aligns with Gen Z’s interest in vaping and nicotine pouches like Zyn. E-cigarettes are the most common tobacco product used by U.S. youth, with 7.7% of middle and high school students reportedly currently using the product, a trend that’s persisted since 2014, according to the CDC’s 2023 National Youth Tobacco Survey.

Altria is an unlikely supporter of a flavored vape ban across 25 U.S. states which would create directories of approved vape products.

“We think these directories are important steps to telling retailers what they can and can’t sell,” Steven Callahan, a managing director at Altria, told Bloomberg this week.

Though the FDA requires authorization of vaping products, penalties for skirting this process are weak and hard to enforce. New legislation would mitigate the number of illegal disposable vapes available in retailers, but some experts argue that Altria’s support of the ban is self-serving: Banning illegal products would be beneficial for NJOY sales.

“These registry bills are a duplicative process being pushed by Big Tobacco,” Campaign for Tobacco-Free Kids spokesperson Dave Lemmon told Bloomberg.