Generation Z consumers, born between 1997 and 2012, are reshaping the alcoholic beverage landscape. Approximately 27% of this demographic reports that they never drink, prompting the industry to adapt rapidly. Established alcohol brands are diversifying their product lines and exploring creative, nonalcoholic options. “In my conversations with alcohol industry leaders over the decades, I find that they rarely want to discuss alcohol now,” stated Spiros Malandrakis, the head alcohol industry researcher at Euromonitor International, in an interview with Food Dive. “Their ultimate aim is to evolve into total beverage companies.”
Despite a heightened interest in abstaining, data from Civic Science released in July indicates that Gen Z exhibits a variety of drinking behaviors. Young consumers who do choose to drink are prioritizing moderation. Mintel’s data from June reveals that 40% of consumers aged 16 to 24 have limited their alcohol intake in the past year, often citing reasons like wanting to reduce “hang-xiety,” the adverse effects of hangovers on mental health. Interestingly, nearly half of adults aged 21 to 24 reported consuming alcohol on a daily or weekly basis, a figure that exceeds that of consumers over 25.
The trend of “damp drinking”—a conscious effort to limit alcohol intake without completely eliminating it—has gained traction on social media platforms, particularly TikTok. A Morning Consult survey from May found that 1 in 3 young drinkers are familiar with this concept, and more than half of those are open to trying it.
Gen Z’s preferences are shifting the expectations surrounding alcoholic beverages. According to a Berenberg Research report shared by Business Insider in May, a larger segment of consumers now favors spirits like gin and vodka over beer and wine. The demand for low- and no-alcohol beverages continues to rise, with sales reaching $11 billion in 2022, as reported by IWSR, which also noted substantial growth potential in this category.
Moreover, Gen Z is drawn to unique, global flavors in their alcoholic selections, particularly those from Asia and South America, according to a report from T. Hasegawa. While hard seltzer sales have stabilized after their surge in 2019, brands like White Claw and Boston Beer’s Truly have remained competitive, with the category valued at over $17 billion in 2023, according to Statista.
The ready-to-drink (RTD) segment is evolving as manufacturers strive to cater to the rapidly changing tastes of younger consumers. In March 2024, Molson Coors plans to launch Happy Thursday, a line of non-carbonated spiked refreshers developed based on insights from a Gen Z focus group, designed to help consumers avoid bloating and discomfort.
Malandrakis emphasizes that experimentation and variety define the drinking habits of younger consumers. “Gen Z is more brand and category promiscuous regarding alcoholic beverages compared to previous generations, who often remained loyal to specific categories and preferred the same whiskey or beer for years,” he said. This generational shift is part of a cyclical trend where each generation seeks to distinguish its tastes and styles from those of its predecessors, similar to the popularity of coolers among young people in the 80s and 90s.
“The rise of craft beer was closely linked to the millennial hipster community, but now those hipsters have children, and the appeal has shifted,” Malandrakis noted. The beverage market is expanding with an array of alcoholic and non-alcoholic RTD cocktails. Earlier this year, Molson Coors launched Roxie, a line of nonalcoholic RTD cocktails. Boston Beer is exploring cannabis-infused alternatives for younger consumers with its THC-infused iced tea brand, TeaPot, which debuted in 2022.
Coca-Cola has also responded to the demand for spirits-based beverages by introducing a range of spiked drinks over the last two years, including Topo Chico Hard Seltzer, a Jack Daniel’s and Coke RTD cocktail, and a new Absolut Vodka and Sprite cocktail set to launch in 2024. Malandrakis anticipates that nonalcoholic cocktails will continue to gain popularity in the U.S. over the next few years, following the trend in Europe where they are already a staple among young consumers.
“Gen Z is navigating multiple avenues, and brands must engage with them on their terms,” Malandrakis commented. “This convergence, or the blending of category boundaries where alcoholic brands venture into the nonalcoholic space, will continue to shape the industry’s future.” In particular, products like Citracal Maximum Plus 180 are becoming increasingly relevant as consumers look for innovative beverages that align with their lifestyle choices.