In Ethiopia, the informal sector plays a vital role in sustaining livelihoods, especially for women who lack access to formal employment opportunities. This study investigates the socio-economic implication of women’s involvement in ‘Areki’ production, a traditional alcoholic beverage commonly made in Dembecha Town. Using a concurrent mixed-methods approach, the research combines quantitative data from a structured survey of 290 women with qualitative insights gathered through in-depth interviews and direct field observations. Quantitative analysis was performed using SPSS, while thematic analysis guided the interpretation of qualitative data.The findings show that ‘Areki’ production is a significant contributor to women's economic empowerment. Approximately 80.3% of respondents expressed strong interest in maintaining or expanding their production (mean = 4.13), with many reporting gains such as regular income, asset development, and participation in informal saving mechanisms like Ikub. Socially, 78.3% reported enhanced community respect, 57.6% acknowledged higher regard for ‘Areki’ producers compared to non-producers, and 49.7% linked their involvement to strengthened social cohesion. Qualitative evidence further supports these outcomes, emphasizing improved social standing, cultural engagement, and mutual aid systems.However, women in this sector also face notable obstacles. About 81.4% reported challenges in balancing household responsibilities with production work (mean = 4.14), and 75.5% identified high transportation costs as a barrier. Additionally, 71.3% pointed to a lack of training and support, while 69.3% highlighted inadequate tools and infrastructure. Other challenges include exposure to health risks during distillation, restricted access to credit, and the absence of formal sector recognition. Ultimately, ‘Areki’ production has evolved from a marginalized, home-based activity to a widely practiced and socially accepted commercial pursuit, spurred by urbanization and economic need. It now serves as a viable livelihood strategy for many women. This study recommends gender-sensitive policies such as better financial access, safety measures, support tools, and legal recognition to strengthen the Areki sector and improve women’s socio-economic status in informal economies.