Gen Z drives alcohol reduction trends, reveals Innova Market Insights

23 Nov 2021 --- The avoidance of alcohol is fast becoming the norm for a growing minority of global consumers. While this trend is evidenced across all age groups, it is most apparent in Generation Z consumers, with as many as a third of consumers aged 18-25 now saying that they never consume alcohol, according to a new report from Innova Market Insights.

Notably, the market researcher says this trend creates an entirely new sub-category within the alcoholic drinks market. Younger consumers appear reluctant to turn their backs on either the taste or sophistication of beer, wine and spirits in favor of traditional soft drinks. 

As a result, alcohol-free choices are flooding the shelves, and concepts are becoming more attractive with botanicals in NPD.

Younger consumers appear reluctant to turn their backs on either the taste or sophistication of beer, wine and spirits in favor of traditional soft drinks.Recently, FoodIngredientsFirst reported on provenance flavors, hard seltzers, tropical tonalities and savory appeal in beverages. 

Low alcohol, more flavor?
According to Innova Market Insights, 4% of all the beers and spirits launched globally in 2021 contained no alcohol at all, rising to 7% among flavored alcoholic beverages (FABs). 

Launch numbers in each area have grown at CAGRs of 20 to 40% over the past five years.

Alcohol removal is also becoming far more mainstream. “The big guns are all invested in the alcohol-free movement,” reports Lu Ann Williams, global insights director at Innova Market Insights. 

“Brands such as Guinness 0.0 alcohol-free stout and Freixenet 0.0 sparkling rosé wine offer both familiarity and novelty to young, brand-conscious drinkers.”

An evolving category
However, it’s not all about a no-alcohol positioning, as launches of low-alcohol drinks such as hard seltzers are growing twice as fast. 

The soft drinks giants have even been exploring this area in partnership with alcohol companies. For example, Coca-Cola (with Molson Coors) already offers the Topo Chico hard seltzers brand, while PepsiCo (with the Boston Beer Co) is ready to roll out Hard Mtn Dew in early 2022. 

PepsiCo has also applied for a trademark that suggests an alcoholic version of Rockstar could be on the cards. 

Whether it is in alcohol reduction or its complete removal, the industry recognizes that alcohol-shy youngsters are the target audience of tomorrow. Adjusting to their needs is a major focus for right now, says Innova Market Insights.

Flavor players ramp up innovation
In this space, key flavor players have been shifting their attention to alcohol-free innovation. 

According to IFF, drinking alcohol in moderation is becoming more mainstream as the new generation of young adults focuses on nutrition, personal health and well-being.

Earlier this month, Kerry unveiled its Botanicals Collection Zero 2.0, pegged by the company as an enhanced next-generation range of high-quality, authentic botanical extracts – containing 0% ethanol – designed specifically for the global rapid-growth low- and no-alcohol beverage arena.Alcohol removal is also becoming far more mainstream.

Last month, Sweegen introduced a series of sweet concepts free of sugar and containing added wellness functionalities, addressing consumer demand for these reformulation strategies. FoodIngredientsFirst attended a webinar that spotlighted a stevia-infused non-alcoholic mojito mocktail and a peach tea promoting stress relief.

Givaudan also unveiled research on “mindful drinking,” offering manufacturers critical insights into what consumers are looking for in low- and no-alcohol drinks and enabling them to create more appealing experiences. 

The moves come as the “sober curious” trend gathers pace in the beverage arena as more individuals opt to lower their alcohol intake or remove it altogether. As Millennials and Gen Z consumers explore a lifestyle less influenced by alcohol, beverage companies target these audiences with NPD. 

Meanwhile, and in contrast, FoodIngredientsFirst recently reported that in light of the COVID-19 pandemic, the premium spirit category has exploded in popularity as consumers are now making their favorite mixed drinks at home. Consumer sentiment, needs and interest have been impacted by unprecedented times, sparking change in the alcohol arena.

By Elizabeth Green