Alcoholism and peer pressure are major themes in this song hence the name and it is evident through analysis of the lyrics. In the intro, Kendrick describes how parties progress from taking lots of shots, to being very drunk, and eventually to passing out. He describes how his grandfather was an alcoholic and why people drink.
They do it to either fit in, because they like the buzz, to dull their pain, or to conform to peer pressure.
In the chorus, Kendrick elaborates on the peer pressure he experienced at that party. People came up to him and called him out for not drinking and told him to take a few more shots. They were trying to help him have a good time but to Kendrick he was not about it.
Lamar views all the liquor he sees around him as enough to fill a swimming pool which concerns him. The analogy of diving in is meant to be becoming drunk off the liquor and he compares it to all the girls diving in like the characters in the TV show Baywatch. Eventually Kendrick relents and he dives in and the intro lines repeat where he drinks in excess and becomes very drunk. In the next verse, Kendrick raps from the perspective of his inner conscience trying to lead him to safety.
He gets liquor courage and sees a girl and decides to drink more and then go talk to her thinking he is now more suave because of the alcohol which is not a good mindset. Kendrick and the girl are assumed to have sex at this point as they are free from the restraints of anxiety due to alcohol and it can be said that they may be taking advantage of each other. As the party goes on Kendrick is once again pressured into drinking more because some people think he is barely partying enough. This leads into the chorus again further emphasizing how far Kendrick is diving in and the intro is repeated too to move along the chronology of the party.
