Cracking the Gen Z BevAl Code
It’s hard to overstate the importance of Gen Z to BevAl. This cohort – comprising those born between 1997 and 2012 – is the largest generation ever, with 2 billion consumers that make up 25% of the world’s population. It’s predicted that by 2030, they will overtake the Baby Boomer generation for spending.
Crucially for suppliers and operators, Gen Z also loves the On-Premise. NIQ’s global REACH research reveals that seven in ten (70%) eat or drink out at least weekly, which is significantly higher than generations like Boomers (43%) and Gen X (56%). Gen Z’s proportion of weekly visitors is even higher in key markets like Britain (78%) and Italy (80%).
Engagement is set to rise even further. Well over a third (37%) of Gen Z plan to increase their On-Premise visits over the next 12 months – nearly double the number (19%) who plan to go out less. However, global economic uncertainty means this generation also face some big challenges. Four in five (81%) of them say they have noticed an increase in the cost of living over the past year, which has sharpened their focus on price and led to changes in their choices of venues and drinks that are vital for suppliers and manufacturers to know.
The moderation mega-movement
As well as facing financial pressures, Gen Z are more sharply focused than previous generations on health and wellness. The powerful combination of these two factors means this generation is at the forefront of one of the biggest trends in the global On-Premise of recent years: moderation.
In Britain alone, more than half (54%) of consumers say they are moderating their alcohol consumption. However, it’s very important to recognise that these people aren’t abandoning alcohol. Instead, they are taking hybrid and less-but-better approaches, by saving consumption for special occasions, having more alcohol-free days, or buying fewer alcoholic drinks when out. Moderation doesn’t mean no alcohol – just that people are more aware of their limits now, and more intentional about their drinking.
Changing tastes and new needs
Moderation has altered demand for some alcoholic categories like spirits. But it’s also creating new opportunities in other segments. In the Off-Premise, adult soft drinks, low and no-alcohol alternatives, and functional products like kombucha, CBD and gut-friendly selections are just three of the category lines that are benefiting from this dynamic – especially among Gen Z.
More growth is certain. In the US, NIQ forecasts that Off-Premise sales of functional beverages will rise at double the rate of the market as a whole in the next year. Products that clearly communicate additional health benefits – to digestion, energy and performance among other things – are also well placed for sharp growth.
Gen Z’s needs are also evolving at pace in the On-Premise. In addition to wellness and value, this generation appreciates novelty, likes to experiment and values social media-friendly presentation. This is particularly true in the spritz and aperitif spaces.
As well as reconsidering what they drink, Gen Z are changing when they drink it. Globally, nearly a third (31%) say they are going out to eat earlier than they did a year ago – 9 percentage points more than the average among all age groups – while just 10% are staying out later.
How to win
Brands that want to connect with Gen Z need to understand these and many more habits and preferences. Engagement strategies have to highlight value, quality and wellness, and find ways to attract those who want to try new drinks.
They also need to appeal for moments of moderation and indulgence – a ‘bothism’ approach that suits Gen Z’s flexible approach to alcohol consumption. ‘Sober curiosity’ and ‘zebra striping’ are two of BevAl’s biggest buzz phrases at the moment, and it’s the brands that adapt to these trends that will capture Gen Z’s trial and loyalty in the years ahead.
Learn how NIQ can help you capture Gen Z demand
NIQ’s suite of research spans consumer and sales insights across the global On- and Off-Premise, giving suppliers The Full View of Gen Z’s engagement with BevAl.
To learn more about solutions including the On Premise User Survey and REACH research across dozens of key territories, contact the NIQ experts.
