How Brands Are Adapting To Gen Z Alcohol Trends - cover image
Brand StrategyNovember 3, 2022

How Brands Are Adapting To Gen Z Alcohol Trends

November 3, 2022
Ashley Lightfoot Photo
Ashley Lightfoot
Content Marketing Manager

Like all goods and services, alcoholic beverages are subject to changes in consumer trends. What was once popular and ubiquitous can slowly start to lose ground to fresh new products on the market. Consumers can and will lose interest if your brand becomes stale, and there’s no other sector that quite demonstrates this like the alcoholic beverage industry.

In one decade, the drink of choice might be craft beer, in another hard seltzer — one moment everybody’s drinking Gin & Tonics, and the next everybody’s ordering Rum & Cokes. Even within subcategories, trends ebb and flow. Take wine, for instance, where different styles and grape varieties pop in and out of fashion — consider the 2005 film Sideways and its protagonist’s disdain for merlot, which was widely credited for depressing the merlot market.

Of course, a strong brand can protect a product line from the worst effects of consumers’ fickle tastes — it is possible to successfully resist the prevailing winds of change, either to prolong your brand’s reign or to elevate it as a perennial choice across a wide range of markets. Just think about brands like Guinness or Aperol.

But beyond the rise and fall of competing brands, there’s a major existential crisis looming over the entirety of the beverage industry… What if people just stop drinking altogether?

Indeed, a growing share of Millennials and particularly Gen Z are turning away from alcohol completely. In the UK, out of all age cohorts, 16 to 25-year-olds were the most likely to be teetotal — while in the US, the number of college-aged consumers who don’t drink alcohol has risen from 20% to 28% in just a decade. In 2022, 38% of Gen Z were “buying more non-alcoholic beverages than in the previous year”.

So, it’s no surprise that brands, seeing the market for their products shrink, are starting to take action — but they’re doing so in a variety of ways.

In this article, we’re going to explore how brands within this category are adapting to changing consumer trends, whether that means changing their messaging and identities to match consumer sentiment or launching new products that appeal to a growing share of teetotallers.

Let’s dive right in.

1. The Alcohol-Free Revolution

The clearest response from brands to the increasing share of consumers going teetotal is the growing range of low-alcohol or alcohol-free beverages that are still positioned adjacent to their alcoholic counterparts. Indeed, the no/low-alcohol drinks category, often shortened to “nolo”, is projected to grow by 31% in the next two years.

Ultimately, the market is developing in ways that mean opportunities await any brand that can fill this growing gap in the market. A strong majority of consumers (61%) “want better choice when it comes to non-alcoholic drinks”, while “58% are drinking more no and low ABC drinks than last year.” Those brands that stick to their guns are likely going to see their market share pulled out from underneath them by new brands offering consumers the variety that they want.

As a result, consumers are likely going to see big brands putting their nolo alcohol products front and center for their advertising campaigns, so as to not be usurped by upstarts and challenger brands.

Take Carlsberg, for example, who re-enlisted the star power of Mads Mikkelsen to create a new version of their Danish-focused ad campaign for their 0.0% product. This represents a real investment in this category for the beer giant — and demonstrates how big alcohol brands are adapting to consumer trends.

But they’re not the only ones at it. Heineken has also recently pumped cash into a lavish campaign for their zero-alcohol beer — set to Stevie Wonder’s “Suspicion”, the ad whimsically positions Heineken as a way for teetotalers to blend in and avoid the suspicions of other drinkers.

But it’s not just established drinks brands that are moving into this space and investing in campaigns. Indeed, newer brands are also coming out of the woodwork with their entire identity pitched at those who want so-called nolo options.

There are brands such as Big Drop Brewing and Athletic Brewing that specialize in alcohol-free craft beers, both positioning their brand in a matter-of-fact way aimed at consumers who don’t want to sacrifice the taste of beer when trying to cut alcohol out of their lifestyle.

For Athletic Brewing this is summed up with their messaging:

“Whether you’re looking to cut out alcohol for life or just for a night, you shouldn’t have to sacrifice your ability to be healthy, active and at your best, to enjoy great beer.”

While for Big Drop, their focus is “making great beer… that just happens to be alcohol-free” — a feat that is backed up by an array of brewing awards, many of which were awarded to their beers over full alcohol entrants — not just other “nolos” like theirs.

In order to get in on the “nolo” game, you don’t just have to be a beer brand! Polly, an alcohol-free spirits brand, is also courting teetotal consumers with its range of gins and Italian-style aperitifs.

The takeaway that we can learn from the way all of these brands have brought their products to market? Positioning is vital.

Rather than deviate from traditional branding, these products embrace the standardized design choices of their industry throughout. They look and feel like the alcoholic brands they’re deviating from. There’s a host of reasons they’re doing this — whether it’s to maximize the taste experience, allow consumers to blend in with their alcohol-consuming buddies, or signal a maturer product that fits in with the other beverages on offer in bars, restaurants, or clubs.

2. Responsible Brands For Responsible Drinkers

Another way that alcoholic drink brands are attempting to sync their identities with the tastes and preferences of Gen Z consumers is by appealing to this generation’s fondness for brands that align with their values.

With more than “three fifths of Gen Z” saying that they’re “likely to stop buying from a brand that doesn’t meet their personal values”, it makes sense for brands that want to speak directly to this demographic to clean up their image and be seen as forces for good.

Beer brands have been really speeding ahead on this front, with brands like Brewdog reinventing themselves as eco-friendly activist brands or Sierra Nevada shouting about their sustainable production plants and “commitment to high quality, low impact brewing”.

It’s no surprise then that specialists have been able to step into this space too, with sustainability built into the core of their brand identity. Brewgooder is one such example, founded with the intention of selling beer to help fund clean water initiatives in developing countries.

In 2021, Brewgooder was awarded “Best for the World” by B Lab, the organization that also awards B-Corp status — “joining brands that include Patagonia and TOMS as one of the highest rated B-Corp brands in the world”.

But other brands in some of the alcoholic beverage industry’s other subcategories are also catching on and building sustainability into their brand — and shouting about their B-Corp status!

One example is whisky brand “Nc’nean”, proudly B-Corp certified, whose entire brand identity is focused on sustainability and the intention to “create a whisky which could exist in harmony with this planet we call home.” Even the brand’s name is in sync with this mission, inspired as it is by the Gaelic goddess Neachneohain — Queen of Spirits and a fierce protector of nature.

3. Mixing Up The Message

The final way that brands are adapting to Gen Z’s shifting tastes and behavioral trends is simply by mixing up the messaging. These are exactly the challenges that brands were designed to overcome.

Of course, it’s a natural fact of life that consumers gradually lose their preference for a particular product or service over time — but this can be combatted by repositioning a brand, appealing to new emotions, and creating fresh demand.

So how exactly are brands doing this?

Heineken’s strategy includes the launch of a new beer, designed to appeal to Gen Z taste buds — Heineken Silver — an accessible & unique lager with a crisp and subtle finish. In order to promote their new beverage, they decided to dip their toes into the world of sneaker culture and teamed up with legendary shoe designer Dominic “The Shoe Surgeon” Ciambrone to create Heinekicks, a pair of limited edition sneakers that actually contain Heineken Silver.

Looking beyond the headline-grabbing stunt, Heineken’s decision to launch a new product designed with its target audience in mind makes perfect sense. Alcoholic drinks are subject to generational trends, with each new age cohort eager to find offerings that sync with their tastes and align with contemporary culture.

This means there are ample opportunities for brands that represent completely new styles of alcoholic beverage — even if it might just be a simple repositioning of an existing product! And for Gen Z, a new category is already proving to be particularly popular.

Yes, we’re talking about hard seltzer, which has exploded out of the US beverages industry and sunk its (white) claws into Gen Z. This wouldn’t be the first new category to achieve huge success with the youngest cohort of consumers that can legally buy and drink alcohol — alcopops and fruit ciders have also offered a winning combination of alcohol, sweet flavor, and low calories to young Millennials and Gen X consumers in the past.

Between 2018 & 2019, sales of leading hard seltzer brand White Claw “grew by 320% in the US”. Even the COVID-19 pandemic couldn’t dampen its ascent, “prompting Nielsen to label it “the most resilient alcohol segment in the US.”

For White Claw, in particular, the success of its brand has been attributed to the way that it markets to a “post-gender world”, which particularly resonates with Gen Z consumers. In advertising campaigns, the beverage is present for kinds of “group hangs” that “define young people’s social lives, marking a break from the typically gendered advertising of beer and wine brands.”

Sanjiv Gajiwala, Vice President of Marketing for White Claw, explained that the world being conjured in their advertising and marketing campaigns “wasn’t a world where guys got together in a basement and drank beer and women were off doing something else, drinking with their girlfriends… Whatever we put out creatively and how we positioned the brand really reflects that everyone hangs out together all the time.”

Danelle Kosmal, Vice President of Nielsen’s beverage alcohol practice backed this up, explaining that “hard seltzer is one of the most gender-neutral products we have seen across the alcohol industry… In comparison, traditional beer drinkers are two times more likely to be men than women.”

The question now, however, is whether hard seltzer brands can retain their position as the generation that embraced them gets older and matures. Millennials and Gen X had brands like Hooch, Baracadi Breezer, Smirnoff Ice, and WKD — all of which synced with the contemporary youth culture of the time to achieve massive growth. However, they were arguably tied too closely to the zeitgeist — drinks that consumers grew out of, and before long “they stopped being seen as aspirational”.

Final Thoughts

All brands must adapt to trends within the market in order to survive — as more and more of Gen Z (who are currently 18-25) — get jobs, move out, go to college, and make more purchase decisions for themselves, their importance to brands will grow too.

This is why so many brands are scrambling to understand their tastes and preferences — and for the alcoholic beverages industry, being in sync with these trends is essential for them to survive. Whether it’s a propensity to drink less, a greater concern for a brand’s values, or simply a yearning for new flavors and styles — Gen Z is already making an impact on the market and the biggest prize will go to the brands that can serve them exactly what they’re looking for.

And if you’d like to learn more about Gen Z’s consumer preferences, feel free to check out our recent Gen Z report.

Brand Strategy
Consumer Insights

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