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!