Why Gen-Z’s changing relationship with alcohol spells happy hour for drinks brands

Our director, Ruth Lee, discusses how Gen-Z’s decreasing alcohol consumption represents an opportunity, rather than a loss, for booze brands.

Recent reports into Gen Z drinking habits could be a sobering read for alcohol brands. Drinking rates among UK adults are at their lowest since 2005, ONS data shows us that there has been a year-on-year decline in young people who state they ‘have had a drink in the last week’ and 25% say they have ‘cut down their alcohol consumption in the past year’ (YouGov Profiles), prioritising work over partying.

This, coupled with the health and wellness trend and reports of alcohol-free accommodation in university campuses, is enough to make any alcohol marketeer more than a little unsettled.

But these reports don’t tell the full story and if you dig a little deeper, it seems that it is not time for booze brands to call last orders on their relationship with Gen Z: it’s simply time to change the rules of engagement.

Recent CGA data shows that premium and super premium spirits are seeing a rise in popularity, with nearly half of consumers opting to order a premium spirit when buying a long-mixed drink. This tallies with our own YouGov Profiles data that shows that they are 16% more likely to have a cocktail at home and 18% more likely to order a cocktail in a pub than Gen X/Y.

Indeed, what we have for the first time, is a Gen Z audience who prioritise quality over quantity. An audience who is more conscious of their purchasing choices and willing to pay more, for better. In short, there has never been a better time for brand building.

For marketeers, this should mean a focus on quality credentials, flavour profile and heritage USPs, as the Gen Z audience finally care. Hennessy’s recent Ridley Scott collaboration, featuring a four-minute movie on each of the seven flavours of the cognac is a good example of a brand focusing on flavour.

With the increasing demand for cocktails, showcasing long-serves and easy-to-recreate mixes, is a wise strategy. Patrón has been leading the way here — shifting perceptions of tequila only served in a shot glass with salt and lemon, to something to be savoured — with inspirational cocktails matched to cultural moments.

It also means the in-bar experience is incredibly important — Gen Z spend less time in bars, so visiting them must be worth their while. Creating a premium environment to showcase beverages and evoke an ‘experience’ is key — particularly if you can weave in Instagrammable features. Expect to see more flower walls and angel wings popping up in drinking holes around the UK.

Building relationships with ‘influencer’ mixologists with powerful social communities at their fingertips is another way to tempt the Gen Z drinkers to get hands on with the product. The collaboration between Richard Wood (aka The Cocktail Guy) and Franklin and Sons on ‘The Taste Collective’ — full of delicious and re-creatable recipes — shows this well.

And it’s worth remembering that although the Gen Z audience might not be going on as many night outs as they used to, they are still consummate culture consumers and are more likely to attend a live music event, and drink at it, than Gen X/Y*.

Brands that position their product as complementary to the other things the Gen Z audience enjoy, versus the main event, are likely to win. Budweiser’s excellent Tag Words campaign, encouraging audiences to search to reveal copy-righted photos of famous musicians enjoying Bud, is a fantastic example of this.

In short, there’s an arsenal of tools to deploy to capitalise on the more discerning tastes of Gen Z and none of it has to involve leaving them (or you) high and dry.

*YouGov Profiles, 2019