By Vince Sgabellone
During a recent media interview, I commented that Gen Z doesn’t consume as much alcohol as older generations. Gen Zers contacted me to defend their alcohol consumption prowess and to advise me that I shouldn’t generalize. Restaurant and pub operators were worried about their livelihoods and reached out to learn more. And other media outlets asked for further clarification and their own quotes. Allow me to explain myself and to defend my initial position with some data.
Let’s begin with some foundational info. Our CREST database of consumer restaurant-consumption trends shows beverage alcohol was included in seven per cent of all restaurant meals for consumers aged 18+ during the 12-month period ending March 2024. This figure is virtually unchanged from five years ago and may appear to contradict widely held notions about beverage-alcohol trends, but it doesn’t tell the whole story. Digging deeper, we see average checks on orders that include alcohol have increased just eight per cent since 2019, or half the average rate. And alcohol consumed without food is up 13 per cent, five times the overall increase in servings. Whether it’s less food, fewer re-fills, or a switch to lower-cost items, restaurant consumers have reduced their average spend per alcohol visit while still enjoying an alcoholic drink.
As you might expect, FSR accounts for more than three-quarters of all foodservice beverage-alcohol servings, included in one-quarter of all FSR visits. QSR accounts for 21 per cent, with the final few points in share going to the retail foodservice segment. Beer is the largest category with more than 50 per cent share, followed by wine, and then cocktails. But the fastest-growing category of beverage alcohol is the “other” category, which includes the growing selection of pre-mixed alcohol-based beverages. Now accounting for more than eight per cent share, or about the same as white wine, these beverages are especially popular in the QSR and retail segments, which serve their beverage alcohol from a refrigerator, not across a bar. In particular, the QSR varied menu subchannel, which includes the up-and-coming non-traditional global-cuisine restaurants, reaches overall beverage-alcohol incidence equal to midscale restaurants. This is yet another example of how these upstart QSR operators (sometimes referred to as fast casual) are carving out a middle ground between traditional QSR and traditional FSR.
What about the generational trends that I kicked off with? Well, I stand by my original sound bite. Gen Z consumes alcohol in restaurants at about half the rate of the boomer generation. Millennials are just ahead of Gen Zers, and Gen Xers are just behind boomers. While average consumption for the two older cohorts increased in the past year, it decreased for the two younger cohorts. The reasons for this variance are numerous and include age, budget, health, and access to other now-legal stimulants. Further, younger generations use restaurants differently than older cohorts, with more convenience-based QSR visits and fewer experiential FSR visits that are more likely to include alcohol. But make no mistake, even as young cohorts don’t drink as much as others, they still consume their fair share of beverages. In fact, every cohort consumes beverages at about the same rate, but with a different mix across the expanding spectrum of beverage options currently available in the market.
A recent study on beverage consumption released by Circana U.S., highlights Gen Z’s beverage preferences in non-alcoholic beverages, specifying that this cohort is on a continuous search for innovation inspiration. Gen Z’s preferences in non-alcoholic beverages reveal a desire for energy, sweetness, fruit flavours, added benefits, and for-me-for-now sizes — think juices, smoothies, enhanced waters, energy drinks and coffee-based beverages. Look to these preferences for innovation inspiration in beverage alcohol and beverage menus in general. This report went on to conclude that Gen Z doesn’t consume as much alcohol as older generations.
