Gen Z Turns 21: Understanding This Generation’s Relationship With Alcohol

The oldest Gen Zers have started to turn 21 years old and reach legal drinking age (LDA). But little is yet known about how and what they will drink and the role that alcohol and alcohol brands will play in their lives. Alcohol companies are strictly forbidden to research consumers before they reach LDA. So, in many ways, they are starting from scratch as they seek to understand this important and emerging demographic. The need for insight is especially important to brands in declining or static sub-categories in alcohol. Currently, we have two years of 21+ Gen Zers to look at, and already we’re finding that their needs and perceptions of alcohol are very different from previous generations. Alcohol companies need to understand and adapt to them to stay relevant.

 

Understanding a Different Type of Generation

Gen Zers are at a pivotal moment as they start to age into adulthood. What’s more, there is already general data showing that this generation is unlike those that came before. Research has shown Gen Z to be the most anxious, medicated, and health and wellness aware. They are strikingly “mature-minded” when it comes to the avoidance of “risky” behaviors. As social media natives, they are highly invested in curating their public identities and are sensitive to behaviors and associations that could cast them in a negative light. So they make a very different cohort of potential alcohol consumers compared to previous generations for whom alcohol was a fun no-brainer category.

 

Trends Shaping Gen Z

Having “grown up” with Gen Z from  our founding in 1999, and with a long history of working with leading alcohol brands, Insight Strategy Group (ISG) decided to take a closer look. In 2019, we fielded a study that included some questions for LDA 21-23 year-olds and found hints of trends to come.

We learned that Gen Zers are drinking less than the Millennials who came before them and drinking differently. A distinct set of taste profiles and consumption habits appeal to them — Gen Zers tend toward lighter and sweeter offerings and also show an appetite for mocktails, alcohol-free bars, and sober socializing. Some of this is no doubt due to being novices in the drinking world, but when engaging an emerging cohort, all such nuances are important to note and track.

Gen Zers are also living at the crux of three big social/cultural trends which suggest that alcohol brands may need to adapt to stay relevant:

  1. Omnipresent social media: While millennials grew up connected primarily to each other via social media, Gen Z is growing up connected to everyone — from their grandparents to their future employers. Their need to present an image to a wider audience drives a more cautious stance overall. By extension, they are less inclined toward categories that make them lose control.
  2. Pot as an alcohol alternative: Cannabis has emerged as an alternative consumable — and one with very different social meanings. Cannabis retains a health and wellness halo and is often seen as more socially acceptable — even in states where it’s not yet legal. Gen Zers are drinking less and smoking marijuana more. 1 in 2 use cannabis versus 36% of Millennials. The increase of vaping creates yet another competitor to alcohol for wallet-share.
  3. The mindful generation: As a group, Gen Zers are anxious and risk averse and tend to seek a sense of balance and overall wellness.

 

How Gen Zers Describe Their Drinking

As alcohol brands begin to focus on building relationships with Gen Z, they will find themselves addressing a very different set of preferences.

 

Quantity of drinkers

Qualities of drinkers

#1: One drink and I’m done drinker (37% Gen Z vs. 29% Millennials)

#2: Happy hour drinker (24% Gen Z vs. 29% Millennials)

#3: I don’t like the taste of alcohol drinker (23% Gen Z vs. 10% Millennials)

 

Qualities of drinks

LDA Gen Zers’ palates are still maturing, but at present when they do drink, they prefer sweeter, less complex, lower-alcohol drinks.

Infographic comparing interest in different types of alcoholic beverages among Millennials and Gen Z.
A couple of times a month or more.
% that drink this alcohol sub-category “a few times per month or more”

How Can Alcohol Brands Connect With Gen Z?

Alcohol brands that want to connect with Gen Z must address changing preferences in how much these consumers drink and what they choose to drink. They must also contend with new competition from cannabis for the attention and affection of these young consumers.

In addition to alcohol-specific factors, brands can also tap into a few key truths about how Gen Zers see their world and the brands in it. Based on our deep engagement with Gen Z, we’ve identified three key principles that guide how the cohort engages with brands. They seek brands that:

  1. Stand for something: In a crowded and competitive market, what are you doing to signal your values and meaning beyond the product? How are you creating experiences and environments that make Gen Z feel secure in enjoying your product?
  2. Empower positive habits: Gen Zers are health and wellness minded. That means they are interested in tasty low-alcohol options — a key factor in the notable rise of hard seltzer with this age group! What are you doing to future-proof your portfolio with options that will appeal to younger consumers?
  3. Maintain relevance by dealing with table stakes: For example, how will you respond to the growing importance of sustainability? Consumers, young ones especially, are looking for options that help them feel good about themselves, their world, and their brands. They respond to brands that help lower their environmental footprint through innovations in production, packaging, and other product characteristics.

Gen Z is young and only a small portion has reached LDA. As they grow into adulthood, Gen Zers will likely continue to surprise and intrigue the brands that seek to connect with them. But the research that’s already available suggests perspectives and preferences that alcohol brands and others can begin to address today. Knowing this cohort better, and understanding what’s important to them across their world, will help categories like alcohol who are just introducing themselves to Gen Z.

We’d love to share more about how our unique expertise and solutions can help your business move forward. Drop us a line here, and we’ll be in touch!


How might Disney and Apple’s new streaming services impact the existing landscape?

With the imminent arrival of Disney+ and Apple TV+, MarketCast conducted a survey earlier this summer of 3,000 current video-on-demand (VOD) users aged 16-54 in the UK, Germany, Mexico, and India. The survey covered perceptions of current and future streaming services, and looked to understand the extent to which an already disrupted market is about to be disrupted again.

The Rise of Netflix and Prime

When it comes to the UK, Germany, and Mexico, there is one company leading the pack: Netflix. Claimed usage of Netflix averages to 77% across the three markets while the closest competitor, Prime Video, has an average claimed usage of 46%. In India, the Disney-owned local provider Hotstar dominates reported usage (76%), followed by Prime Video (65%) and Netflix (61%).

To understand Netflix’s dominance, we investigated perceptions of the different services. Across all markets, Netflix was synonymous with ‘high quality content’ and ‘unmissable programmes’. However, there was some variation across the three markets Netflix led in:

  • In Mexico, the streaming service leads all competitors on all measures
  • In the UK, BBC iPlayer challenges Netflix in terms of ‘ease of use’ and ‘family-applicability’
  • In Germany, perceptions of Prime Video are fairly close to Netflix especially for delivering ‘something for everyone’

Across markets, Prime Video is seen as the second choice VOD service, both in terms of claimed penetration and brand perceptions. However, only 38% of Prime Video users claim to use it daily. This is compared to 58% for Netflix users. One possible reason for the difference is that whilst Prime Video is also seen to have ‘high quality content’, it’s less likely than Netflix to be seen as ‘unmissable’.

However, whilst Netflix excels amongst 16-34s, Prime Video is able to boast a more balanced profile. Indeed, reported usage in Germany and India amongst 35+s exceeds that of Netflix. This provides Prime Video with a broader audience platform from which to build.

Disney and Apple’s Demographically Desirable Audiences

Despite limited information on these forthcoming services (at the time of going to field), intended uptake for new streaming services from both Apple and Disney is high. And, crucially, the potential audience for both services are financially comfortable, heavy TV consumers. However, some key differences exist:

  • Disney has a younger-skewing potential subscriber base (16-34s interest is 9%  higher than 35+s) than Apple TV+
  • Apple TV+ intenders are more likely to be parents of children over 12 years old (5% higher than Disney+ intenders) whilst Disney+ intenders are more likely to have younger children
  • And when it comes to other entertainment, those interested in Disney+ are more likely to be film lovers (13% higher than VOD users). However, those considering Apple TV+ are more engaged with audio streaming services (10% higher than VOD users)

The Battleground: Amazon Vs Apple and Netflix Vs Disney?

Should consumers hit a saturation point and begin to choose, it appears that there are two groupings of competition:

  • Those leaning towards Disney+ rather than Apple TV+ are more likely to already subscribe to Netflix (80% compared to 73% of VOD users) and, like Netflix, subscribers skew younger
  • Those leaning towards Apple TV+ rather than Disney+ are more likely to be existing Prime Video users (56% compared to 51% of VOD users) with both stronger amongst 35+s

What Does This All Mean?

With forthcoming streaming services from Comcast, Time Warner, and others set to fragment the landscape, it becomes difficult to make predictions, but our data highlights:

  • Netflix’s delivery of high-quality, unmissable content has seen it rise to the position of market leader, particularly in the UK and Mexico
  • India and Germany are where Prime Video and Netflix are closest, with Prime strongest amongst the 35-54 audience
  • Disney+ looks to have good potential amongst younger, affluent audiences, with its film franchises and traditional child-friendly content proving to be appealing
  • Apple TV+’s potential audience is also desirable and most similar to Prime Video

There is currently an appetite for new entrants; however, there will likely be a saturation point due to time and cost limitations. But in the meantime, it appears the disruptors will face disruption.

Read the study findings in full on the MarketCast website here.

 


Consumers Set the Pace for Back-to-School

Since 2017, we’ve seen brands move up their back-to-school campaign by more than two weeks (Urban Outfitters tweeted about back to school 17 days sooner than it did two years prior, Meijer was 14 days sooner, and Target was 13 days sooner).

On average, consumers are still taking to their own social accounts, expressing their plans to go back-to-school shopping before retailers are announcing their back-to-school campaigns. Nordstrom and Amazon had the widest gap between consumers talking about back-to-school and promoting it themselves (Nordstrom was 27 days and Amazon was 44 days).

While some retailers may feel that they are risking angering consumers by launching too early — as backlash mentions made up 4% of Target’s current back-to-school conversation — that was minimal compared to those talking about their purchases (13%). An additional 11% of Target’s back-to-school conversation stemmed from shoppers positively discussing the in-store displays.

Political leanings were part of this year’s back-to-school conversation. This was most prevalent with Walmart, as consumers were boycotting the store after the shooting in El Paso, Texas. Alternatively, consumers used it as a way to share their love for Target — feeling the retailer better represented their personal beliefs.

New this year is a concern for safety while shopping — with 2% of Target’s conversations stemming from feeling unsafe. While consumers often tied this to the recent Walmart shooting, they had concerns over retailers that allowed concealed carry and feared crowded stores — feeling it could be a potential target for shooters.

Visual below reflects the first consumer mention of shopping for back to school at the specified retailer compared to the initial back-to-school themed post from the retailer’s owned Twitter account — comparing the 2017 to 2019 back-to-school season.

Timeline of the first consumer mention of shopping for back to school at the specified retailer compared to the initial back-to-school themed post from the retailer’s owned Twitter account — comparing the 2017 to 2019 back-to-school season.

 

 

Interested in learning more about this topic or our broad-ranging expertise? Please contact us here, and we’ll be in touch.


Labor Unrest to Highlight NFL Storylines in 2019

1. What will be the top NFL storyline during the 2019 season?

Labor unrest – 31%
Player social activism – 22%
TV ratings – 16%
Talk of extending the season – 15%
New media rights – 7%
International events/growth – 5%
Not sure / No response – 4%

2. Which of the following fall events do you most look forward to?

Start of the college football season – 30%
Start of the NFL season – 24%
MLB Playoffs – 15%
Start of the NHL season  – 10%
Start of the NBA season – 9%
US Open – 4%
NASCAR’s Chase for the Cup – 3%
FedExCup Playoffs – 2%
MLS Playoffs – 1%
Not sure / No response – 2%

3. As the NFL celebrates its 100th season this year, in which decade of its existence was the league the most culturally relevant?

2010s (now) – 22%
2000s – 18%
1990s – 12%
1980s – 16%
1970s – 15%
1960s – 3%
1950s – 1%
1940s and earlier – 0%
Not sure / No response – 13%

4. Which one person has had the most impact on growing the popularity of the NFL?

Pete Rozelle – 17%
Tom Brady – 13%
Jerry Jones – 7%
Paul Tagliabue – 4%
Roger Goodell – 3%
Joe Namath – 3%
Not sure / No response – 53%

5. Compared to last season, the 2019 NFL business KPIs will generally be…?

Up – 38%
Flat – 42%
Down – 14%
Not sure / No response – 6%

6. At the moment, who is the face of the NFL?

Tom Brady – 42%
Roger Goodell – 9%
Patrick Mahomes – 4%
Colin Kaepernick – 3%
Baker Mayfield – 3%
Jerry Jones – 3%

7. Recently Alex Meruelo became the first NHL team owner of Hispanic descent by purchasing the Arizona Coyotes. In what ways, if any, do you expect this fact to improve the NHL’s position with Hispanics?

Increase fan interest locally – 48%
Increase interest from sponsors – 18%
Inspire others to consider NHL ownership – 14%
Increase fan interest in the NHL nationwide – 5%
Drive youth hockey participation – 4%
Not sure / No response – 35%

8. To ensure the long-term success of the Arizona Coyotes, Alex Meruelo should…

Relocate the team elsewhere in the Phoenix, AZ market – 32%
Relocate the team to another market – 26%
Keep the team in Glendale, AZ – 12%
Not sure / No response – 30%

9. When does the boost in business for an NHL team that wins the Stanley Cup disappear?

Within 1 year – 21%
Within 2 years – 38%
Within 3 years – 27%
Within 4 years – 3%
Within 5 years – 3%
The boost in business lasts more than 5 years – 5%
Not sure / No response – 3%

10. What grade would you give each of the following leagues on their commitment to improving lives and doing good in American/Canadian communities? (A through F, Not sure; “GPA” shown)

NBA – B (2.96)
MLB – B- (2.58)
NHL – B- (2.58)
NFL – C+ (2.22)
MLS – B- (2.50)
PGA Tour – C+ (2.30)
NASCAR – C- (1.68)

For context, below are the results from the same question asked among fans of the respective sport in the most recent edition of the Sponsor Breakthrough Study. (Example: in November 2018, NASCAR fans gave the league a grade of B+ for the league’s community efforts)

NASCAR – B+ (3.40)
PGA Tour – B+ (3.39)
NHL – B+ (3.29)
MLS – B+ (3.27)
MLB – B+ (3.19)
NBA – B (3.13)
NFL – B (2.85)

11. What is the most important role of sports?

Building character and teaching young people important values – 20%
Providing entertainment and refuge from daily life – 38%
Serving as a platform to connect and unite people from all walks of life – 35%
Motivating people to lead an active and healthy life – 4%
Offering opportunities for people to socialize – 3%
Not sure / No response – 0%

12. Where do you stand on the topic of professional athletes voicing their opinions on social issues?

They are free to speak their minds – 79%
They should stay away from discussing social issues – 14%
It is their responsibility to do so – 6%
Not sure / No response – 1%

One Question on the Lighter Side:

13. Which legendary NFL player would you most like to see play today?

Jim Brown – 16%
Walter Payton – 10%
Barry Sanders – 9%
Lawrence Taylor – 6%
Bo Jackson – 5%
Joe Namath – 5%
Gale Sayers – 4%
Joe Montana – 4%

14. Thinking about your own particular business, what best describes your confidence level regarding the next 12 months for your own business?

7 – Extremely optimistic – 13%
6 – Very optimistic – 41%
5 – Somewhat optimistic – 26%
4 – Neither optimistic nor pessimistic – 13%
3 – Somewhat pessimistic – 6%
2 – Very pessimistic – 1%
1 – Extremely pessimistic – 0%
Not sure / No response – 0%

Chart showcasing net optimism about individuals' businesses from August 2018 to August 2019.

A Helping Hand: How Brands Can Drive More Environmentally Friendly Decisions

Narratives about how we need to change our behaviors for the health of the planet are becoming louder, especially among Gen Z and Millennial consumers. But a wholesale shift towards living in more environmentally conscious ways can be tough. What we say doesn’t always translate into what we do. And in fact, it’s hard to make more sustainable choices unless we have access to products and services that support them.

  • 70% of Gen Z and Millennials care a lot about environmental protection (about half of whom say they’re “passionate” about it)

Increasingly, consumers not only want brands to align with their personal values, but also they want brands to take a more active role in helping them more easily “do their part.”  Among Gen Z and Millennials, our study found that:

  • 3 in 4 say knowing a brand’s views on certain issues is important to them
  • 89% agree that brands have the power to change people’s minds on issues
  • 4 in 5 say brands have a moral obligation to “do good”

But these consumers are also not necessarily willing to forgo the convenience and quality they’ve come to expect in today’s personalized and connected world. Consumers are calling for more, and brands should be listening.

 

And Some Brands Are Listening

A quick look at the marketplace shows a growing awareness across industries and verticals of how brands have an opportunity to shake up landscapes and grow their businesses by empowering consumers to make better decisions through product and packaging innovations, messaging, and brand initiatives.

A few examples show how widespread the trend is and how varied the specific approaches are based upon where a brand focuses.

Inforgraphic with images and examples of how brands are offering more environmentally friendly options and nudging consumers towards sustainable decisions.

Bridging “Want” and “Will”

Brands like these are making it easier for belief and behavior to converge. That’s important because often there is a tension between the real self and the ideal self — between the good a person wants to do and the trade-offs they are actually willing to make in order to achieve that good. Brands face a tension too between authentic eco-friendly initiatives and simply “green-washing” or doing only lip-service to environmental goals. For example, it’s one thing to switch from plastic bags to cotton, but that cotton itself comes with a significant environmental footprint.

In our work, we often hear consumers express a deep desire to do good and for brands to walk the walk (not just talk the talk) by giving them tools and options to feel like they’re making the better choice. In turn, brands need to ensure that these good intentions actually lead to good results. By doing that, they can help consumers bridge the gap between real and ideal.

 

It Just Makes Cents

Consumers are on the look-out for ways to buy that are more environmentally friendly. Brands can create a win for these consumers — and for themselves — by bridging competing priorities. For example, they can enable environmentally conscious choices that are just as convenient as less sustainable options. And they can do so while actually raising their topline:  Not only are 88% of Gen Zers and Millennials more likely to trust a brand that aligns with their values, two in three are willing to pay a premium for that brand.

It is well worth it for brands to apply an environmental lens to all that they do and offer — in everything from product development to packaging innovation to marketing. In doing so, a brand can not only win consumer heart-share but also consumer wallet-share.

 

We’d Love to share more about how our unique expertise and solutions can help your business move forward. Drop us a line here, and we’ll be in touch!