A good number of those in Gen Z of the legal drinking age don’t drink, a trend to which convenience-store retailers should adapt.
Half of Gen Z did not consume alcohol sourced at retail in the last 30 days, compared with 48% of millennials and 53% overall, according to Donna Hood Crecca, principal at CSP sister research arm Technomic, Chicago, who spoke earlier this month at CSP’s 2024 Outlook Leadership conference in Rancho Palos Verdes, California.
“Those that do drink, it’s not like previous generations when they were that age,” Crecca said. “It’s a very different generation when it comes to alcohol. About half are now legal drinking age [those 21 to 31].”
“Interestingly, more Gen Zers than millennials didn’t drink alcohol sourced at retail in the past month,” she said. “Now, based on historical norms, the behaviors of prior generations when they were age 21 to 31, you would expect the share of abstaining from alcohol consumption to be much, much lower among Gen Zers, but you’ve also probably heard, read or even maybe observed this growing trend that fewer Gen Zers drink, and those that do, do so less often and they typically consume fewer drinks per occasion. We’re seeing this across all of our data.”
So, why do consumers abstain from alcohol, Crecca asked.
According to a June Technomic consumer survey, Gen Z abstained from consuming alcohol sourced at retail in the last month for the following reasons:
- Trying to control my spending (also top reason among all).
- I never drink alcohol (fourth place among all).
- I’m sober curious (second place among all).
- I have a specific health issue/diagnosis (third place among all).
- I prefer to consume legal marijuana/cannabis products.
“Abstinence is socially acceptable,” Crecca said, noting that 40% of younger legal drinking age Gen Zers (those 21 to 24) versus 35% of all legal drinking age consumers, never drink alcohol.
“For this generation, especially the younger cohort within it, not drinking is normal,” she said. “Abstinence is socially acceptable for them.”
She added, “The data I see is definitely pointing to this generation, especially the younger ones, being unlikely to change their mindset and their behaviors as they continue to age.”
When Gen Zers were asked why they don’t consume alcohol in general, without asking about a specific time period or sourcing occasion, the top reason they gave is they dislike the taste, Crecca said. Another big reason is they want to avoid “hang-xiety.”
‘Hang-xiety’
“What is ‘hang-xiety’?” she asked. “This is a generation that has a lot of anxiety; it’s been documented. The thought of having a hangover elevates their anxiety,” she said. “Having a hangover can send it off the charts.”
Another reason Gen Zers avoid alcohol is they perceive it as unhealthy—and other options are more appealing, such as cannabis, where use is frequent at home and away from home, she said.
“This is the first generation to come into legal drinking age with cannabis as an option, now in 24 states,” she said. “By 2025, more than half the states will have legalized marijuana and cannabis for personal, recreational consumption.”
In states where cannabis is legal, 49% of Gen Zers consume it, Crecca said, adding that cannabis cannibalizes alcohol consumption, with 84% of younger Gen Zers (age 21 to 24) and 91% of older Gen Zers (age 25 to 31) substituting cannabis for alcohol at home once per month or more.
“The primary drivers of this substitution is that they enjoy consuming cannabis more than they enjoy consuming alcohol, and they prefer the effect,” she said. “The alcohol categories most likely to be substituted or cannibalized by cannabis usage at home are beer, hard seltzer and, to a lesser degree, spirits—and that’s by Gen Z specifically.”
Beer’s Growth Outlook
Gen Z challenges the beer category growth outlook at convenience stores, which should recognize that abstinence is normalized, Crecca said.
“Factor lower consumption by this large cohort into sales planning and projections,” she said. “Showcase appealing nonalcohol options.”
Retailers also should strategically engage Gen Zers who do imbibe by:
- Offering a relevant beer assortment—category, style, brand.
- Offering relevant beer promotions—price, occasion, tone (such as authenticity, respect, humor).
- Leveraging ready-to-drink beverages, spirits and wine for incremental growth.
“We want to engage Gen Zers who do drink, and the traditional approaches may not work,” Crecca said. “This generation is very, very different than prior generations. We want to think about category, style—they gravitate to sessionable beers [lower in alcohol and higher in refreshment]. They gravitate to local crafts. They really like imports—this is a very diverse generation, they’re global citizens.”
“And they think differently about brand,” she continued. “They think a lot about brand reputation, so you need be thinking about that when you’re putting your shelf sets together.”
She added, “At-home socializing is more important to Generation Z than it is to other generations.”
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.