Home » Generation Z Reduces Alcohol Consumption by 20% Compared to Millennials: What Does This Mean for the Drinks Industry?

Generation Z Reduces Alcohol Consumption by 20% Compared to Millennials: What Does This Mean for the Drinks Industry?

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Generation Z Reduces Alcohol Consumption by 20% Compared to Millennials: What Does This Mean for the Drinks Industry?

Generation Z Reduces Alcohol Consumption by 20% Compared to Millennials, Posing Challenges for the Drinks Industry

Generation Z is a generation that knows what they want and sticks to it. They prioritize the balance of work and family life, build their communities on the Internet and are not interested in social pressures. While some of these priorities may be beneficial, they also put companies in a bind when trying to serve both older, established consumers and this new, emerging customer base.

In the drinks industry, this can be a difficult balance to strike. According to a 2018 study from Berenberg Research, Gen Z drinks 20% less per capita than millennials did in their late teens and early 20s, and 64% say they expect to drink less in their adult lives than the older generations.

The National Public Health Information Coalition reports that 72% of boomers have had an alcoholic drink in the past month, compared to 65% of GenXers and 53% of millennials. However, some companies may have more problems than others.

The State of the American Wine Industry 2024 report from Silicon Valley Bank shows that 58% of consumers over 65 years of age – that is, the baby boom generation – prefer wine to other alcoholic beverages, while the rest of the demographic groups are almost 30 points below.

Despite forecasts suggesting that the alcohol sector will increase from $2.1 billion in 2022 to around $4 billion in 2029, the growth of non-alcoholic and low-alcohol alternative beverages is also increasing.

How can alcohol brands satisfy all their consumers, researchers and developers working on non-alcoholic and low-alcohol alternatives with investing in bestsellers? There is some work that is being laid at the feet of chief innovation officers and product junkies to figure out how traditional alcohol brands can appeal to the sober-curious.

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There are a number of reasons why young people decide not to drink or don’t drink as much, from the health benefits to curiosity about other products on the market. Some are driven by stigma and shame about what generations drink greater than others. Generation Z is more flexible than other demographic groups when it comes to drinking, with some exploring adaptogenic drinks that claim to offer mood-enhancing qualities.

As a result, the alcohol industry is looking to adapt and innovate to cater to the changing consumer trends. From small, independent breweries like Adnams to major brands like Bacardi, there is an increased focus on non-alcoholic and low-alcohol alternative beverages, ready-to-drink cocktails, and a wider range of choices in bars and pubs to attract a more diverse clientele.

Ultimately, the changing habits of Generation Z are driving a ripple effect in the drinks industry and beyond, requiring establishments to constantly innovate and adapt to changing consumer preferences. The future of the industry may not depend on encouraging younger drinkers to embrace tradition, but on ushering in a new era.

(c) 2024, Fortune

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