Capturing the next generation has long been an issue that wine and spirits producers need to address. What will they want to drink? How to capture their attention? Lumping everyone between the ages of 21 and 40 into the same general ideological category is a mistake. While Millennials and Generation Z have a lot in common, there are also significant differences between them. Understanding both their habits and their desires is key to reaching them.
Defining the generations
In the US, there are around 88m Millennials, who have a reported US$30.2bn in spending power. This generation witnessed, first-hand, the mainstreaming of business online and the advent of Social Media. For much of their lives, the country’s economy has been strong.
Generations Z consumers, the oldest of whom are in their mid-20s, are around 77.9m strong, with a reported $10.7bn in spending power. They have no memory of life without Instagram, they have been indelibly impacted by the economic collapse and recession of 2008 and many graduated from college into the pandemic, when the work/life balance was transformed.
Defining Millennial and Generation Z consumers is a technical matter, of course, but is also essential to any conversation about the differences between them. According to Pew Research, a dependable arbiter of such disputes, anyone born between 1981 and 1996 is a Millennial, whereas those born in 1997 or later are members of Generation Z.
How should alcohol brand owners target these similar but disparate groups? Here’s what we can learn from the research and some top producers.
Younger generations think seriously before sipping
About 48% of Gen Z is open to ‘dry dating’, a.k.a. booze-free interaction with romantic interests, a practice that previous generations would have found anathema. Fewer Millennials – but still a healthy 37% – feel the urge to date without lubrication, according to a study from Reach3 Insights, a full-service market research consultancy. Both generations hit the bottle to release stress, Reach3 reports, but a full 74% of Millennials gravitate towards alcohol to relax, as do 66% of Generation Z. Overall, 88% of both groups focus on non-drinking activities like physical activities and exercise, play board games, read or practice mindfulness to achieve balance.
There’s also the widely-reported turn towards healthier alcoholic options, Reach3 confirms. More than half (60%) of both generations say they’d be more interested in brands that offer lower-ABV options and/or health benefits, but only about 14% are intentionally seeking them out.
- Offer innovation In targeted messaging
Younger generations want variety and innovation. They’re also more likely to be influenced – and make their buying decisions – based on what they see on Social Media. About 75% of Millennials say that a brand’s Social Media presence impacts their purchasing decisions. Generation Z tends to gravitate toward YouTube, Instagram and Snapchat, while Millennials find their groove on YouTube and Facebook, according to a study from marketing firm Animoto.
They also do their research: About 80% of Millennials and Generation Z check out brands online before clicking buy, in part to ensure that the company’s ethos reflects their own.
- Be authentic
Born in 1886, Remy Cointreau’s St-Remy brandy is still as young as springtime – selling about 700,000 cases a year and steadily taking about 18.2% in value market share – by staying hip to what the cool kids want. Global brand director Hervé Buzon explains that communication is key. “Generation Z and Millennials are looking for true, honest and authentic experiences from brands,” he says. “They also don’t want to over-spend. We are transparent and humble about who and what we are.” Two years ago, the brand owner introduced St-Remy Signature, an expression that intentionally meets a younger generation of spirits consumers where they are.
“Through Social Media platforms, we are able to bring visibility of the brand to this audience and initiate conversations that educate them on the background of brandy as a whole and St-Rémy’s contribution to the category,” Buzon explains. “We also have found that video tutorials on platforms like YouTube have also helped generate more in-depth opportunities to educate our target about the brand story and how to enjoy it, particularly in terms of cocktails to make at home.”
- Make them a part of your story
Other brands find that sharing their story simply and authentically can drive engagement. Launched in 2016, Drumshanbo Gunpowder Irish Gin enjoyed rapid success but ground to a halt during the pandemic. “We were in more than 70 countries and had plans to open a visitor experience in Drumshanbo, Ireland before COVID halted construction,” says Conor O’Brien, international market manager at The Shed Distillery, which produces Drumshandbo Gunpowder. “It became an emotional decision to push forward because we had a fundamental commitment to the local community who supported us from the very beginning.”
The company also pivoted to make emergency hand sanitiser to help local health services and charities when there was zero supply, O’Brien says, adding that along the way, they shared their ever-evolving story on Social Media without explicitly marketing it. “Millennials and Generation Z do not want to be overtly marketed to,” O’Brien says. “They want to discover brands for themselves. They are streetwise and well-educated … and will use modern technology to get ‘under the bonnet’ of the brand and quickly dismiss the fakes. Global connectivity means they have unlimited choice and access to an infinity of spirits brands from every corner of the world. They demand authenticity and provenance; a genuine story they can connect with on a human level.”
Ultimately, they need to feel part of the story. “They need to be brought on a journey of discovery,” O’Brien says. “The fact that consumers can visit The Shed Distillery and get a look behind the scenes has earned respect … for our brands from younger generations.”
- Prioritise sustainability
Both generations want brands to prioritise the environment; 75% place greater importance on sustainability over brand names and are willing to spend 10% more on eco-friendly products, according to a study from marketing analysts Team Lewis. Erik Miller, owner of & winemaker at Breaking Bread Winery in California, is personally invested in sustainability but is also aware of how transparent he has to be as a natural winemaker. “Overall, I think Millennials and Gen Z look for transparency,” Miller says. “They want to know what they’re drinking – what goes into the product and the ethics involved in making it. Beyond that, thoughtful and sustainable farming also seems to be very important, and rightly so, as we see global climate change shifting farming practices across the nation.”
Lower alcohol levels are also rising in popularity, he notes, and what he calls the “yum-yum factor”. Miller finds that sharing Breaking Bread’s story – in a studied, and casual way – works best on Social Media. “Millennials and Gen Z don’t want to be marketed to in a really obvious way,” he says. “It’s about an organic, authentic approach. Social Media, when authentic, can do that. Instagram is the most successful for Breaking Bread, far and away.”
- Build community by offering something new
For Millennials and Generation Z, there’s a serious thirst for novelty. “The number one thing I see Millennials and Gen Z looking for with alcohol products is new experiences, which is why we’re seeing such a boom in the RTD market,” says Adelaide Campbell, CEO of Miami-based cachaça brand Kachaça. “New flavours, textures and occasions are what drive these consumers and they’re not afraid to pay a premium for these experiences. Think passionfruit, lychee, yuzu or bitters and drinking occasions beyond happy hour like game nights, poolside or picnics.”
Kachaça launched this summer, and the company – while young – is enjoying 30% growth every month. While Social Media is an essential component of the brand’s growth strategy, Campbell finds that in-person events have more of an impact. “Tasting demos, educational happy hours and fun cocktail competitions,” are great, Campbell says. “We have also gotten great traction with our newsletter, which includes playlists, cocktail ideas with pairings and giveaways that keep our community engaged.”
- Wear your heart on your label
These generations are socially and politically engaged. Making that a part of your brand identity can be a boon. “The Community Spirit Co was founded in part to celebrate changemakers and organisations that are elevating the communities around us,” says Camille Austin, director of advocacy at the vodka brand owner’s parent company, Casa Lumbre.
Many younger drinkers shop with their hearts and minds, even more than their palates. “Millennials and Gen Z are shaping the habits of shopping … through selective purchases that align with their moral beliefs, whether it’s a brand’s commitment to sustainability or racial and gender equality,” Austin says. “As a new spirit, The Community Spirit Vodka is connecting with these respective generations due to their own commitment to amplifying the voices of changemakers in the communities around us. The blank canvas featured … on the bottle serves as a platform … to spark conversations and amplify the muted voices in all communities. The accessible price point allows these individuals to enjoy a product that supports the causes that mean the most to them.”
Eyes on the prize
Even when brands master the art and science of selling, they will have to stay on their toes for long-term success. Brand loyalty is low among younger consumers unless they feel their wants and needs are being taken into account. So, by all means, keep talking, share your story, invite them over to your place. But, make sure you’re listening to what they’re saying too.
For generations, producers defined drinking culture. But, the tables have now turned.
This article was initially published by The Alcohol Professor, a US-based online “homeroom” that covers beer, cocktails, spirits and wine along with travel tips, book reviews, bar reviews, recipes and videos.
