Many young consumers are drinking alcohol in moderation – or abstaining from it altogether – creating a new and unmet need in the market for innovative soft drinks.
Data from the US highlights how, in the past two years, volume sales of alcoholic beverages in America have fallen – by around 0.1% in 2016 and 0.2% in 2017.[1] This decline, reported by market analyst IWSR in its US Beverage Alcohol Review, was the equivalent of 80 million liters last year. IWSR said the decrease in total alcoholic beverage consumption was directly related to “the slow-building trend of moderation or not drinking at all. Signs of health and wellness permeate the industry with increasing frequency. From all-natural ingredients to low-ABV to zero-proof mocktails, consumers are clearly gravitating toward ‘healthier’ drinking experiences.”
Meanwhile, in a survey of US consumers commissioned by investment banking firm Berenberg, 64% of Generation Z respondents said that, as they grow older, they expect to drink alcohol less frequently than older generations currently do.[2] According to Berenberg, Generation Z “does not think that it is ‘cool’ to get drunk.” It adds: “We expect that members of Generation Z will continue to drink considerably less than their Millennial counterparts as they grow older. Based on observed trends and the results of initial surveys, we expect that members of Generation Z will drink upwards of 25% less per capita than Millennials did between the ages of 18 and 49.”[3]
New wave of Clean Lifers
In its recently published Top 10 Global Consumer Trends for 2018 report,[4] market researcher Euromonitor International calls this new wave of young alcohol avoiders ‘Clean Lifers’. It also warns that these consumers are not being adequately served by the beverage market. “With sobriety rising, there is frustration at the poor range of options in terms of low alcohol or non-alcoholic drinks, especially when socialising in bars and restaurants,” it says.
Kevin Kilcoyne, VP and General Manager, Global Ingredients Group at Welch’s, commented: “There remains untapped potential in the soft drink market for new propositions that fit any occasion. Clean lifers enjoy going out and socializing, but they want to be healthy, so many of them are turning their backs on alcohol. This demonstrates that an opening also exists for products such as ‘mocktails’ – stylish beverages which look great and contain delicious and nutritious ingredients.”
References:
[1] IWSR website. US Beverage Alcohol Volumes Decline Again in 2017. Jan 8, 2018.
www.theiwsr.com/content/press/2018/Press%20Release%20-%20US%20Beverage%20Alcohol%20Declines%20in%202017.pdf. (Accessed April 3, 2018)
[2] Javier Gonzalez Lastra, Matt Reid, Molly Wylenzek. Meet Generation Z. Berenberg. London, UK. Feb 16, 2018. p11; p14.
[3] Javier Gonzalez Lastra, Matt Reid. US demographic dividend to fizzle. Berenberg. London, UK. Sep 12, 2017. p34.
[4] Alison Angus. Top 10 Global Consumer Trends for 2018. Euromonitor International. London, UK. 2018. pp3-6. go.euromonitor.com/white-paper-economies-consumers-2018-global-consumer-trends-EN.html. (Accessed April 3, 2018)
