By Howard Parry-Husbands, founder and CEO of Pollinate

Pubs have been a quintessential part of Australian culture for longer than most of us can remember. For decades they have acted not just as a neighbourhood social hub, but a key part of Australia’s cultural identity. However, the Aussie pub could become a victim of changing taste, as our new research suggests pubs – and the hospitality industry in general – are under threat from Gen Z.

Pollinate research* found that more than seven in 10 Gen Z’ers say that they don’t need to drink to have a good time with friends. It’s a different perspective to the classic “drinking for drinking’s sake” mentality. Gen Z drink less alcohol than other generations, with only 60 per cent drinking weekly compared to millennials (79 per cent). In fact, Gen Z no longer view alcohol as a primary part of socialising and opt for alternatives that don’t involve excessive drinking.

While it may be surprising, it’s completely understandable that Gen Z are rewriting the rule book when it comes to how they spend their time and money. Born between 1997 and 2012, they have lived through some wild times, from the GFC and natural disasters to wars and the COVID-19 pandemic. As they enter adulthood, Gen Z face a challenging economic landscape characterised by slow wage growth, inflation, sky-high property prices, increasing HECS debt payments and an unpredictable global economy.

This uncertainty is having a profound impact on Gen Z’s behaviour and priorities, creating a generation marked by caution and consideration, in stark contrast to their more spontaneous predecessors, the millennials. This shift is evident in their focus on financial planning, with 78 per cent of Gen Z expressing a keen interest in saving money for their future.

For publicans and hospitality operators, keeping up with the changing trends set by the financially cautious and socially responsible Gen Z is critical for business survival and success. Unlike previous generations, Gen Z doesn’t go out, drink and spend money just because it’s the norm. Most require a reason, an event or an elevated experience to gather. It’s very conscious thinking, with 67 per cent striving to avoid wasting their weekends with hangovers.

However, it’s not all doom and gloom for pubs. Gen Z places a lot of store in shared experiences with friends and is willing to spend on these experiences. That means they are more likely to explore new pubs and bars that offer a unique concept or vibe, and are drawn to venues and immersive, aesthetically driven environments with special programming like DJs, themed nights, trivia and any kind of organised fun. They want unique, engaging experiences, creating both challenges and opportunities for the hospitality and entertainment industry.

If pub and bar owners can provide these kind of engaging experiences, Gen Z will come, and they will drink. Their drinking habits reflect intention and moderation, favouring quality over quantity. It’s more about having a few nice cocktails with friends rather than a dozen beers. For them, drinking is not an occasion in itself.

Gen Z are breaking the mould set by generations that have come before. They are adapting to a challenging economic environment, redefining social norms and shaping the way they approach socialising and leisure activities. This has a direct impact on how the hospitality industry caters to this generation, and it’s a necessity that venue operators understand that things can’t go on as they have been.

Opportunities are ample, for those that understand the challenge and can adapt and stay relevant, instead of trying to roll out the same formula that worked with previous generations. Gen Z are redefining Australia’s cultural identity as they grow, and those that don’t grow with them will get left behind.

*Pollinate research March-December 2023, N=600

This op ed was first published in the March issue of Australian Hotelier.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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