• by Aaron Paquette , Columnist, October 10, 2022

Cash-strapped consumers have stopped spending on alcohol. According to Morning Consult, self-reported alcohol spending fell 15% from February to March, as consumers began feeling the bite of inflation. And year over year, spending across all categories of alcohol, from wine to liquor to beer to malt beverages and hard seltzer, fell 26%-34%. The declines are especially pronounced among millennials (the youngest generation in the study), falling by 36% since last October.

Drinkaware concurs in a 2019 study, finding that U.K. consumers 16-25 are more likely to be sober than those over 25, and about a quarter of this demographic aren’t drinking at all. And a 2018 report by Berenberg Research shows that Gen Z is consuming less alcohol than previous generations. Their interest in beer has declined most precipitously, making Gen Z the first generation to prefer liquor to beer.

What’s driving Gen Z’s rejection of alcohol? For starters, they’re a health- and fitness-obsessed generation, and drinking makes it harder for them to attain their wellness goals. In addition, they’re a generation concerned about safety and social propriety, and they’re aware that the risk of assault or harassment increases with every drink. They also avoid pressuring peers into unsafe or unhealthy activities, so there’s less hazing or encouragement to binge drink, chug or “just have one more.”

Secondly, many young adults now favor cannabis over alcohol. According to a Technomic survey reported in Restaurant Business Online, in states where pot is legal, about two-thirds of Gen Z consumers are smoking it, and about half are drinking it in the form of cannabis-infused beverages. Smoking pot is seen as a carb-free, calorie-free alternative to drinking beer, with the added benefit of being considered “natural” and “organic.” And few bar brawls have ever broken out after a long night of smoking weed, vs. doing shots.

Finally, Gen Z are the first digital natives, and it’s much cooler to be sober online than intoxicated. In the Studio 54 era of the 1970s, or even Les Deux in the aughts, nobody was recording all your shenanigans with a cell phone and posting them online. Today, it’s much harder to have a wild night out without the world seeing it, and everything you said and did coming back to haunt you forever. Conversely, there are whole online communities for the “sober curious,” in support of movements like Dry January. Plus, it’s hard to nail those TikTok challenges if you’re slurring and staggering.

How can brands better connect with this sober generation?

*Promote energy drinks. Other than cannabis, “uppers are in, downers are out.” Gen Z has a lot to get done, and powers through their day with coffee, tea, energy drinks and herbal supplements. So rather than reaching them with alcohol tie-ins, do so with beverages that provide a much-needed pick-me-up.

*Consider cannabis. Now that recreational cannabis is increasingly legal, consider cannabis-infused beverages, edibles, and supplements with THC. The beverage of the future isn’t a Budweiser; it’s a cannabis-infused soda. Find ways to integrate cannabis, hemp or THC into your brand.

*Provide alternatives to alcohol. If your brand can be consumed, it can be promoted as a healthy alternative to alcohol. Provide use cases for how it can be incorporated into a “mocktail” or a recipe to be served at a sober gathering, or enjoyed as a group in lieu of drinks. And provide resources for those who are “sober curious,” even if they’re just experimenting with Dry January or abstaining one day a week in favor of a healthier alternative.

By increasing your brand’s relevance among sober adults, you’ll ensure that it becomes a lifelong habit.