As increased moderation and cost of living challenges continue to see consumers spend less on alcohol across world-leading markets, Gen Z is re-engaging with alcohol, reviving participation rates and consumption occasions.
According to leading alcohol data and intelligence analysts, IWSR, there is a mixed picture across the world’s leading 15 markets – including Australia – as consumer sentiment remains positive and is recovering in some markets.
IWSR says that recalled alcohol consumption among the LDA+ Gen Z age cohort has risen to similar levels of participation seen in the population as a whole in most markets.
In addition, younger consumers are increasingly frequenting on-premise venues and are more inclined to explore a diverse range of drink categories, maintaining a broader repertoire than their older counterparts.
“Alcohol usage among LDA+ Gen Z adults has increased significantly from April 2023 lows, and there is evidence that the propensity to go out and spend more is recovering among this group – challenging the received wisdom that this generation is ‘abandoning’ alcohol,” said Richard Halstead, COO Consumer Insights.
While the long-standing premiumisation trend in wine and spirits continues to show signs of slowing, premium-and-above beer is gaining momentum in key markets such as Brazil, France and Spain. However, growth in the no-alcohol category appears to be losing steam in some regions.
Halstead said: “The current macroeconomic climate is posing a challenge for beverage alcohol, with consumer sentiment neutral to negative, and spend even more subdued. The US and China are seeing some of the biggest falls, and sentiment has weakened across Asia-Pacific, with other markets maintaining the same levels as a year ago.
“India remains the only market with all three indicators – consumer sentiment, recalled volume and recalled spend – in positive territory, as upper-middle-class consumers continue to drink and spend more.”
According to IWSR’s Bevtrac findings, there has been a marked increase in alcohol participation levels among Gen Z consumers compared to two years ago. Australia recorded one of the strongest jumps, with rates climbing from 61 per cent to 83 per cent.
The report also highlights a number of encouraging trends for beverage alcohol among Gen Z, including a stronger interest in exploring multiple drink categories, high engagement with spirits, a more relaxed approach to moderation, and a growing appetite for on-premise experiences.