State of the Nation Report: Alcohol
We conducted a 360 state of the nation report to get under the skin of today's alcohol market from the perspective of 18-30 year-olds.
The report analyses a macro view on the audience, whilst delving into what they are drinking, the key factors that influences their consumption choice as well as the future of the market for this demographic.
With access to over 2500 UK consumers, aged between 18 and 30, through Q2 analysis from GWI data we can understand who this age group are, their attitudes to drinking and their favourite alcoholic (and non-alcoholic) beverages.
Secondary datasets and reports are like absolute gold dust, hence throughout this report we reference over 30 external reports, opinions and insights to formulate a point of view.
The combination of these two approaches provides a holistic, 360 view on the market.
The latest data suggests than Gen-Z are putting a handbrake on the traditional UK 'drinking culture'.
Source: GWI, Q2 2022 tracker
Out of all generations, Gen Z has the highest amount of ‘non-engagers’ when it comes to drinking alcohol and the least amount of regular drinkers.
Even when you break the data down to Gen-Z students, it doesn’t shift the dial. 14% of Gen Z students say they’re regular drinkers and 20% say they’re non engagers.
This shift has been driven by three key factors.
Image & Control
49% of Gen Z claim their online image is always at the back of their mind.
76% feel it is important to always be in control of all aspects of their life.
Productivity & Success
Gen Z places work/university performance above socialising in their life priorities.
Physical & Mental Health
86% of Gen Z feel mental health is just as important a consideration as their physical health.
70% consider binge drinking as a “very risky” activity, and 41% associate alcohol with “vulnerability”, “anxiety” and “abuse”.
Source: Think with Google
Young adults are still drinking. Just not as much and have evolved their priorities.
One of those 'evolved priorities' is the RTD market.
RTD volumes have been growing faster than any other major drinks category since 2018.
RTD now commands a 4% market share in the alcohol sector and is predicted to reach 8% by 2025.
They’re 65% more likely than the average UK consumer to have bought a RTD/pre-mixed cocktail in the past month.
Source: GWI, Q2 2022 tracker
Unlike other alcoholic beverages, 18-30 year olds own a large chunk of the market.
18 – 30 year olds represent 44% of the RTD/pre-mixed cocktail market vs owning just 23% of the beer and 21% of the wine market.
Source: GWI, Q2 2022 tracker
When you look at the details, this shift to RTD and pre-mixed cocktails makes sense.
Gen-Z drink to get social not sloshed.
Source: Knit, 2022 Gen Z alcohol report
Gen-Z prefer a night in over a night out.
35% of 18-30 year olds have decided not to attend social gatherings or parties since the COVID-19 outbreak.
Only 7% of 18-30’s have become more interested in clubbing and nights out since COVID-19.
Source: Knit, 2022 Gen Z alcohol report
And when they do go out out, it’s about experience.
Quality over quantity.
69% of bar managers report an increased demand for cocktails over the past five years. 72% also reported greater consumption of premium drinks.
Instagramable moments.
71% of bar managers say their bars have to be unique these days to attract customers, often capitalising on an Instagramable feature wall or installation as a calling card that has social currency in online conversations as friend groups plan their night out.
Relaxed, small and social gatherings
80% of consumers prefer to meet up in small groups and choose a relaxed atmosphere.
Human touch & tech.
Order and pay app usage has rocketed as a result of increased safety measures. 46% of customers like the ease of this technology BUT more than half (54%) believe that positive interaction with staff adds to a memorable experience.
Source: Trunk BBI, will Gen Z fall in love with hospitality again?
Taste and calorie intake are
becoming more important.
78% of 18- to 35-year-old Britons are concerned about the amount of calories in the alcohol they consume.
60% of British drinkers are receptive to new versions and flavours of popular alcoholic beverages.
Source: Knit, 2022 Gen Z alcohol report
The future of the sector and audience…
They’re still drinking alcohol BUT they’re driving a new drinking culture.
As Gen Z look to socialise differently and broaden their horizons, 68% of drinkers have at least tried low or non-alcoholic beverages according to research carried out in late 2020. Younger generations are especially interested in switching over, with Gen Yers and Zers using low an-non-alcohol drinks as a way to control their alcohol consumption, meaning they’re perhaps more open to sampling alternatives.
The next generation is driving new must-haves and considerations for brands
73% of Gen Z consumers are willing to pay more for sustainable products, more than every other generation.
59% of UK consumers aged 18 to 44 expect food brands to offer a plant-based option.
37% of the Gen Z population restricts gluten in their diets to some degree
The current economic climate is causing consumers to cut back.
41% of ALL UK consumers have decreased their spend on alcohol in the past three months as a result of the pandemic.
Gen Z top three sources of concern:
-53% – Rising prices
-19% – Job security/unemployment
-Invasion of Ukraine
49% of all Gen Z agree that they’re scaling back their lifestyle as a result of the increased prices.
Source: McKinsey
The impact? Despite increased price worries the RTD and Hard Seltzer market isn't slowing down.
Top forecasted growth channels between 2020 and 2030.
-Online – 197%
-Super and hyper markets – 159%
-Alcohol stores – 144%
-Food service – 141%
-Other – 133%
Source: Statista
Interestingly Morrisons is the top performing supermarket when it comes to Hard Seltzer sales.
The top selling brands?
Top selling alcoholic RTDs in bars, restaurants, clubs etc..
Value of ready-to-drink alcoholic beverages sales in the on-trade channel in the United Kingdom in 2021, by brand (in million British pounds)
Source: Statista
So, what does this all mean?
It is evident that drinking culture for the 18-30 demographic has seen a drastic shift in 2022. Post-pandemic, consumers are looking to utilise drinking to make the most of their experiences, rather than drinking to forget their experiences. Brands need to consider the values that consumers are looking for, and the occasions that they can appear, in order to really tap into this audience.
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