Restaurants: Why is Gen Z really drinking less? It’s not what you think

Why is the topic trending?

• Challenging Conventional Wisdom: The article addresses a widely discussed topic – the changing drinking habits of Gen Z – and presents a counter-argument to common assumptions about their health consciousness and values. This makes it newsworthy and engaging for those in the alcohol industry, marketing, and anyone interested in generational trends.

• Data-Driven Analysis: The report cited in the article uses data to support its claims, adding credibility and making it more likely to be discussed and shared within relevant industries.

• Implications for a Major Industry: The alcohol industry is a significant global market, and shifts in consumer behavior, especially among a large demographic like Gen Z, have substantial financial implications, making this a trending topic for industry professionals and investors.

• Societal Shift: The change in alcohol consumption reflects broader societal shifts in how young people socialize and their relationship with risk and image in the digital age.

Overview:

The article discusses a new US-focused report by Rabobank senior beverage analyst Bourcard Nesin, which argues that Gen Z's decreased alcohol consumption is primarily driven by economic factors and the impact of the digital world, rather than just health concerns or a preference for premium experiences. The report challenges common generalizations and provides a data-driven perspective on the future of alcohol consumption.

Detailed Findings:

• Economic Constraints: Gen Z has less disposable income compared to older generations at the same life stage due to lower income and less stable employment. They spend a similar proportion of their after-tax income on alcohol as millennials did, but the total amount is lower due to their limited funds.

• Historical Trends: Younger adults have been increasingly delaying their drinking initiation over the past four decades. The analysis suggests Gen Z will follow this pattern, with consumption likely increasing as they age, though potentially remaining slightly below previous generations.

• Impact of Digital Life: The prevalence of smartphones, social media, and constant parental surveillance has drastically reduced underage drinking. The risk of being photographed while intoxicated and the potential for viral spread makes alcohol less appealing to young people concerned about their online image and potential consequences.

Key Takeaway:

The primary drivers behind Gen Z drinking less are economic limitations and the influence of the digital age on their social lives and risk assessment, rather than solely a heightened focus on health and wellness.

Main Trend:

• Delayed and Potentially Lower Alcohol Consumption Among Young Adults: Gen Z is starting to drink later in life and might ultimately consume slightly less alcohol overall compared to previous generations at their age.

Description of the Trend (please name it):

• The Economically and Digitally Influenced Temperance: This trend signifies a shift in alcohol consumption among young adults, primarily driven by their economic realities and the pervasive impact of the digital world on their social behaviors and perceptions of risk.

What is consumer motivation:

• Financial Prudence: Limited income motivates Gen Z to spend cautiously, potentially prioritizing other expenses over alcohol.

• Image Management: The desire to maintain a positive online image and avoid the negative consequences of being publicly intoxicated, fueled by the constant presence of cameras and social media.

• Navigating Parental Oversight: Increased parental surveillance, enabled by digital technologies, reduces opportunities for underage drinking.

What is driving trend:

• Economic Instability: Lower income levels and less secure employment among young adults compared to previous generations at the same age.

• Ubiquitous Digital Presence: The widespread use of smartphones and social media, leading to heightened awareness of online reputation and the risks associated with public intoxication.

• Shifting Social Norms: Socializing increasingly happens online, reducing traditional alcohol-centric social gatherings, particularly for younger individuals.

What is motivation beyond the trend:

• While not the primary drivers, health and wellness concerns may still play a secondary role for some individuals within Gen Z.

• A desire for "premium experiences" might lead some to opt for higher-quality drinks less frequently, but this is not identified as a major driver in the report.

Description of consumers article is referring to:

• Age: Primarily refers to Generation Z, encompassing individuals roughly born between the mid-1990s and the early 2010s, focusing on those approaching and in their young adult years (teens to early-mid twenties). The report specifically mentions US high school seniors and young adults.

• Gender: The article does not specifically focus on gender differences in drinking habits within Gen Z, suggesting the trends discussed are broadly applicable.

• Income: Characterized by lower incomes and less stable employment compared to older generations at the same life stage. Many are just starting their careers and forming independent households.

• Lifestyle: Heavily influenced by the digital world, with a significant portion of their social interaction occurring online. They are also under greater parental surveillance during their teenage years due to technological advancements.

Conclusions:

The report concludes that the decreased alcohol consumption among Gen Z is largely due to economic limitations and the impact of the digital environment shaping their social lives and risk perception. While health and premiumization are often cited, the data suggests these are not the primary drivers. The industry should anticipate a partial rebound in consumption as Gen Z matures and their economic situations potentially improve, but the overall levels might remain slightly lower than previous generations.

Implications for Brands:

• Rethink Marketing Strategies: Brands should shift away from simplistic narratives around health and premiumization and acknowledge the economic realities faced by Gen Z.

• Focus on Affordability: Offer products and experiences that align with Gen Z's budget constraints.

• Navigate the Digital Landscape: Be mindful of the digital scrutiny Gen Z faces and tailor marketing messages accordingly. Avoid promoting excessive intoxication or risky behaviors.

• Consider Later Engagement: Recognize that Gen Z might become significant alcohol consumers later in life and develop long-term engagement strategies.

Implication for Society:

• Potential Shift in Social Norms: The delayed and potentially reduced alcohol consumption among Gen Z could contribute to a broader societal shift in attitudes towards alcohol, particularly in social settings.

• Improved Public Health Outcomes: Reduced underage drinking, driven by digital surveillance and shifting social norms, could lead to positive public health outcomes in the short term.

• Economic Impact: The alcohol industry will need to adapt to potentially lower consumption rates among younger demographics, which could have economic implications for producers, distributors, and related businesses.

Implications for Consumers:

• Delayed Introduction to Alcohol: Gen Z individuals are likely to start drinking later in life compared to previous generations.

• Greater Awareness of Online Reputation: Young consumers are more conscious of how their behavior, especially when involving alcohol, might be perceived online and the potential long-term consequences.

• Potential for Increased Spending Later: As their economic situations improve with age, Gen Z consumers may increase their alcohol consumption, potentially leading to shifts in their spending habits.

Implication for Future:

• Evolving Alcohol Market: The alcohol market will need to adapt to a generation that has a different relationship with alcohol, potentially leading to innovation in lower-alcohol or alcohol-free beverages and alternative social activities.

• Long-Term Consumption Patterns: While a rebound is expected, it's possible that the overall alcohol consumption levels in future generations will be lower than in the past due to the lasting influence of the factors currently affecting Gen Z.

• Intersection of Digital and Physical Social Life: The way young people socialize and engage with alcohol will likely continue to be shaped by the evolving digital landscape and its interplay with in-person interactions.

Consumer Trend (name, detailed description):

• Cautious Consumption: This trend describes Gen Z's approach to alcohol, characterized by delayed initiation and potentially lower overall consumption driven by economic constraints and the desire to manage their online image in the digital age. They are more cautious about spending on non-essential items like alcohol and more aware of the risks associated with public intoxication due to the pervasive nature of social media and digital surveillance.

Consumer Sub Trend (name, detailed description):

• Digitally Discreet Socializing: This sub-trend reflects how Gen Z's social lives, heavily influenced by digital platforms, often lead to less frequent in-person gatherings where alcohol traditionally plays a role. When they do socialize in person, the awareness of potential digital documentation and its consequences encourages more discreet and moderate alcohol consumption.

Big Social Trend (name, detailed description):

• The Maturing Digital Native: This trend encompasses the broader societal impact of a generation that has grown up entirely in the digital age. It includes their heightened awareness of online identity, their reliance on digital platforms for social interaction, and how these factors influence their behaviors and choices across various aspects of life, including alcohol consumption.

Worldwide Social Trend (name, detailed description):

• Global Shift Towards Mindful Consumption: While the article focuses on the US, there is a broader global trend, particularly among younger demographics, towards more mindful consumption across various categories, including food and beverages. This involves greater awareness of health, sustainability, and personal well-being, which can contribute to more conscious choices regarding alcohol.

Social Drive (name, detailed description):

• Economic Realism: This social drive underscores the significant influence of economic factors on the behavior of younger generations. Facing financial challenges such as student debt, the rising cost of living, and less stable early career opportunities, Gen Z is driven to make practical and budget-conscious decisions, impacting their spending on discretionary items like alcohol.

Learnings for brands to use in 2025: (bullets, detailed description)

• Acknowledge Economic Constraints: Understand that affordability is a key factor for Gen Z. Consider offering value-driven options, smaller serving sizes, or promotions that align with their budgets.

• Focus on Experiences Beyond Alcohol: Market your brand around the overall social experience rather than solely the alcohol content. Highlight the social connections and activities that accompany consumption, and consider non-alcoholic alternatives as integral parts of the offering.

• Emphasize Digital Responsibility: When marketing to Gen Z online, promote responsible consumption and be aware of their concerns about online image and potential negative consequences of excessive drinking.

• Build Long-Term Relationships: Recognize that their consumption might increase later. Focus on building brand loyalty and positive associations that will resonate as their purchasing power grows.

• Explore Lower-Alcohol and Alcohol-Free Options: Cater to the growing segment of Gen Z that is choosing to drink less or not at all by offering appealing and innovative alternatives.

Strategy Recommendations for brands to follow in 2025: (bullets, detail description)

• Value-Oriented Product Lines: Introduce or highlight product lines that offer good value for money, appealing to the budget-conscious nature of Gen Z. This could include more affordable options or innovative packaging for single servings or smaller quantities.

• Digital-First Marketing with a Focus on Authenticity: Engage Gen Z on digital platforms where they spend their time, using authentic and relatable messaging. Avoid overly promotional or tone-deaf content that doesn't resonate with their values and concerns about online image. Partner with influencers who promote responsible socializing.

• Create Alcohol-Adjacent Experiences: Sponsor or create events and activities that appeal to Gen Z's interests and offer social engagement opportunities where alcohol is optional or not the central focus. This could include gaming tournaments, creative workshops, or outdoor adventures.

• Invest in Research and Data: Continuously monitor the evolving drinking habits and preferences of Gen Z through market research and data analysis to adapt strategies effectively over time. Pay attention to economic indicators and digital trends that influence their behavior.

• Develop Portfolio of Options: Ensure a diverse product portfolio that includes lower-alcohol and alcohol-free alternatives to cater to the varying preferences and consumption patterns within Gen Z. Position these options as equally appealing and integral to the brand.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified):

Gen Z's relationship with alcohol in 2025 is primarily defined by a cautious and delayed engagement, influenced by their current economic realities and the pervasive impact of the digital world on their social lives and self-perception.

What brands & companies should do in 2025 to benefit from trend and how to do it:

Brands and companies should adapt to Gen Z's "Economically and Digitally Influenced Temperance" by focusing on affordability, promoting experiences beyond alcohol, emphasizing digital responsibility in their marketing, building long-term engagement strategies, and offering a diverse range of products including lower-alcohol and alcohol-free options. This can be achieved by conducting thorough market research to understand their specific needs and preferences, tailoring product offerings and pricing accordingly, engaging authentically on digital platforms, and creating marketing campaigns that resonate with their values and acknowledge their economic constraints and digital awareness.

Final Note:

• Core Trend:

  • Economically and Digitally Influenced Temperance: Gen Z's alcohol consumption is characterized by being both delayed and potentially lower due to financial limitations and the impact of their digitalized social lives, marked by a strong awareness of online image and risk.

• Core Strategy:

  • Value-Driven and Digitally Responsible Engagement: Brands should prioritize affordability and value in their offerings while employing digital marketing strategies that are authentic, responsible, and acknowledge Gen Z's unique concerns and online presence.

• Core Industry Trend:

  • Shift Towards Diversified Beverage Portfolios: The alcohol industry needs to adapt to changing consumption patterns by investing in and promoting lower-alcohol and alcohol-free alternatives alongside traditional alcoholic beverages to cater to a broader range of consumer preferences and occasions.

• Core Consumer Motivation:

  • Pragmatic and Image-Conscious Choices: Gen Z consumers are motivated by financial prudence and a strong desire to manage their online image, leading them to make cautious choices regarding alcohol consumption, prioritizing affordability and avoiding public intoxication documented online.

Final Conclusion:

Understanding the multifaceted drivers behind Gen Z's drinking habits – primarily economic constraints and the digital environment – is crucial for brands to effectively engage with this demographic in 2025. Strategies that prioritize value, promote responsible digital citizenship, and offer a diverse range of beverage options are essential for success in this evolving market.

Core Trend Detailed: Economically and Digitally Influenced Temperance:

• Description: This core trend describes the evolving relationship Gen Z has with alcohol in 2025. Unlike previous generations, their consumption is notably influenced by two primary factors: their current economic limitations and the pervasive nature of digital technology in their lives. This results in a tendency to delay their initiation into drinking, potentially consume less alcohol overall, and approach consumption with greater caution. They are mindful of their spending and acutely aware of the potential for their actions to be documented and shared online, leading to a more tempered approach to alcohol.

• Key Characteristics of the Trend (summary):

  • Delayed Initiation: Gen Z is starting to drink alcohol at a later age compared to previous generations.

  • Lower Overall Consumption (Potential): While a rebound is expected as they age, their lifetime alcohol consumption might be slightly lower.

  • Economic Sensitivity: Their purchasing decisions, including alcohol, are heavily influenced by their limited disposable income and economic realities.

  • Digital Awareness and Image Consciousness: The constant presence of cameras and social media drives a desire to maintain a positive online image, discouraging excessive drinking and risky behaviors.

  • Shift in Socializing: A greater proportion of their social interaction occurs online, leading to potentially fewer alcohol-centric physical gatherings, especially in their younger years.

• Market and Cultural Signals Supporting the Trend (summary):

  • Reports Highlighting Economic Challenges: Studies and reports indicate that Gen Z faces lower income levels and less stable employment in their early adulthood compared to previous generations at the same stage.

  • Decline in Underage Drinking Statistics: Data shows a significant decrease in alcohol consumption among high school students, coinciding with the rise of smartphone use and social media.

  • Increased Focus on Digital Footprint: Cultural emphasis on online reputation and the potential for viral content contributes to greater self-monitoring of behavior, including alcohol consumption.

  • Growth of Non-Alcoholic Beverage Market: The increasing availability and popularity of non-alcoholic and low-alcohol alternatives signal a growing consumer interest in options beyond traditional alcoholic drinks.

  • Social Media Trends: Online discussions and trends often highlight the downsides of excessive drinking and the benefits of moderation or sobriety, influencing peer norms.

• How the Trend Is Changing Consumer Behavior (summary):

  • Prioritizing Spending: Gen Z consumers are likely to allocate their limited funds towards essential expenses and experiences they deem more valuable than frequent alcohol consumption.

  • Mindful Consumption: When they do choose to drink, they are more likely to do so in moderation and be conscious of the potential social and professional repercussions of public intoxication.

  • Seeking Alternatives: They are more open to and actively seeking out non-alcoholic and low-alcohol beverages as viable alternatives for social occasions.

  • Shifting Social Activities: Social gatherings may be less centered around alcohol, with a greater emphasis on shared activities and experiences that do not necessarily involve drinking.

  • Delayed Brand Loyalty: Alcohol brands might need to work harder to gain their loyalty, as Gen Z may only become regular consumers later in life when their economic situation stabilizes.

• Implications Across the Ecosystem (summary):

  • For Brands and CPGs: Need to innovate and offer value-driven options, explore lower-alcohol and non-alcoholic categories, and tailor marketing messages to resonate with Gen Z's economic realities and digital awareness.

  • For Retailers: Should consider stocking a wider variety of non-alcoholic and low-alcohol beverages, potentially adjust shelf space allocation to reflect changing consumer preferences, and create shopping experiences that appeal to budget-conscious consumers.

  • For Consumers: May experience a delayed entry into the world of alcohol consumption, potentially leading to different social dynamics and a greater emphasis on responsible drinking habits when they do consume. They might also benefit from a wider range of beverage options.

• Strategic Forecast: The trend of "Economically and Digitally Influenced Temperance" is likely to persist in the near future as Gen Z continues to navigate their early adulthood with economic challenges and in a hyper-digital environment. While a gradual increase in alcohol consumption is expected as they age and their financial situations improve, their overall relationship with alcohol might remain more cautious and less central to their social lives compared to previous generations. The alcohol industry will need to adapt to this evolving landscape to maintain relevance and growth.

• Final Thought: Gen Z's relationship with alcohol is not simply a matter of choice but is significantly shaped by the economic and technological context they have grown up in. This necessitates a nuanced understanding from brands and the broader society to effectively engage with this generation.

Source: https://www.thedrinksbusiness.com/2025/04/why-is-gen-z-really-drinking-less-its-not-what-you-think/