Is Gen Z the End of the Alcohol Industry?
Is the alcohol industry in trouble with the newest wave of young beverage consumers? A recent study has gained significant attention in the last several months based on its conclusion that members of Generation Z are drinking less alcohol compared to previous generations.
Who is Generation Z?
According to the Pew Research Center, Generation Z (or Gen Z) are those born between 1996 and 2012. This generation follows the Millennials, but part of what defines them is that they tend to be more health-conscious and have never known a time in which technology was not a part of their daily lives.
The study, conducted by equity research firm Berenberg, surveyed 6,000 Americans between the ages of 16 and 22 and revealed that, in addition to expecting to drink alcohol less frequently than older generations currently do, Gen Z is the first age demographic to prefer wine and spirits to beer.
While Millennials have been blamed for kicking off a downward trend in the consumption of beer, it appears that Gen Z is following suit. Respondents stated that they are more interested in consuming wine and spirits like gin, whiskey, and vodka rather than beer. They also noted that they feel big-name beer brands are “inauthentic and unappealing.”
Based on responses and trends within the study, researchers are suggesting that members of Gen Z may drink up to 25 percent less per capita than their Millennial peers did at the same age. Gen Z respondents described their concerns with drinking based primarily on potential health issues, as well as judgment by their friends or family. In essence, they just don’t see drinking as “cool.”
What Can Retailers Do?
While the study has some warnings that may put the alcohol industry on high alert, it’s important to note that the oldest members of Gen Z are still only approximately 22 years old. Most are still outside the permissible reach of alcohol advertising. Because members of this generation are are still outside the industry’s target audience, their preferences for alcohol are unlikely set or refined and their brand loyalty won’t be influenced until they grow older.
The study does, however, signal an area of opportunity for the alcohol industry to appeal to a generation of both young and mature adults within the legal consumption age range. The growing health and wellness movement that Gen Z is embracing can also be embraced by the industry as a way to keep up with the healthy lifestyle trend. For example, manufacturers can look to create more healthful beverages such as those with lower levels of alcohol or tout beverages with more health benefits, such as cocktails with no-added-sugar fruit juice or even branded mocktail mixes.
Regardless of the approach, the message is clear that Generation Z is different than those that precede it. The alcohol industry is advised to stay cognizant of how it targets the newest generation of consumers.