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Insight of the Day: Study shows Gen Z starting to drive innovation in beverage alcohol

According to a report by Circana, Gen Z consumers aged 21-26 are driving variety and innovation in the beverage alcohol market. The report highlights several key factors that are fueling demand in the market, including flavor profiles, packaging, and product formats.

Ready-to-drink (RTD) cocktails and hard seltzers are particularly popular among Gen Z consumers. The RTD category has experienced significant growth, reaching $10.3 billion in sales in 2023, with variety packs being the top-selling format. Brands are also exploring crossover products, with non-alcohol brands venturing into the beverage alcohol space to meet evolving consumer demands.

When it comes to RTD cocktails that resonate with Gen Z, they often feature a higher alcohol-by-volume (ABV) content, are made by recognizable brands, and have packaging suitable for diverse occasions.

Convenience and innovative experiences are priorities for today's beverage alcohol consumers, according to Scott Scanlon, Executive Vice President of Alcohol Beverages at Circana. Scanlon suggests that exciting flavor profiles will continue to drive innovation in the industry, and brands should consider incorporating premium ingredients and packaging to remain competitive.

Gen Z's preferences and the influence of evolving consumer values are shaping the beverage alcohol industry. Will Blum, CEO and founder of Bluebird Hardwater, a canned spirit brand, acknowledges the changes driven by younger generations. Blum notes that Generation Z desires options and experiences while being increasingly concerned with health and wellness. Bluebird Hardwater aims to cater to these preferences, offering a light and non-alcoholic option crafted from ultra-purified water and premium spirits.

Circana's report also highlights a trend among consumers shifting from value to premium options in the beer and wine categories. Gen Z consumers aged 21-26 show a preference for sparkling wines with fruity or sweet notes, as well as a variety of beer options, including flavored alternatives, Mexican imports, and economy brands.

As brands focus on convenience, innovative flavors, and premium ingredients to stay competitive, the influence of Gen Z on the beverage alcohol market is expected to continue growing in the future.


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