Among the many rocks being slung at the beverage alcohol industry, one of the biggest is the claim that younger LDA consumers are considerably less interested in its wares than older generations are/were. A research note from Rabobank this month, however, has dug deeper into the claim and found that the argument is at best, flawed, and at worst, downright lazy.
The report, ‘The Real Reasons Generation Z is Drinking Less Alcohol’, starts by referencing an Instagram post from an account called ‘insidehistory’ (which has 5.5m followers) last month.
Citing figures from the Bureau of Labor Statistics in the US, the post claims that “Gen Z drinks 87% less alcohol than previous generations”.
“Though the post is, surprisingly, even more incorrect than most commentary on the subject,” counters Rabobank’s senior beverage analyst – and report author – Bourcard Nesin, “the data cited in this Instagram post is emblematic of a broader failure among journalists and industry analysts to distinguish between shifts in behaviour driven by life stage and shifts in behaviour driven by generation.”
Indeed, Nesin qualifies the source data by flagging that the widely-agreed age range for Gen Z consumers – those born between 1995 and 2012 – contains a sizable cohort that isn’t of legal drinking age or above. “Furthermore,” he adds, “the members of Gen Z that are over 21 years old have yet to get a college degree, are working an entry-level job or not working at all, and therefore don’t have any money to spend on alcohol.”
What is of critical relevance here is that the same circumstances applied to the previous generations of Millennials, Generation X and Baby Boomers.
The report goes on to admit that Gen Z consumers are drinking less alcohol than their predecessors, but then poses the crucial question: Will they eventually start drinking more?
“Understanding why Gen Z drinks less than previous generations did at the same age is very important for answering this question,” says Nesin, before offering up as two explanations the ubiquity of mobile devices as part of teenage life, and the associated rise in the likelihood of ‘getting caught’ from these devices.
Put simply, parents and “school administrators” today know not only where the kids are but also what they’re doing.
“On one hand,” Nesin expands, “the move away from in-person socialisation toward social media seems like a permanent shift, with consequences for young people’s wellbeing that go far beyond alcohol consumption. However, if the main driver is universal parental surveillance and a loss of privacy making underage drinking a far riskier activity than it was in the past, then that is a condition or restriction that will disappear as Gen Z becomes more independent during later years of adulthood.”
The report also breaks down the demographics within Gen Z, citing figures from the National Survey of Drug Use & Health in the US that show that “women now represent the majority of adult alcohol consumers aged 25 and under”.
Another noticeable change is also ethnic/racial lines: “Black, Asian and Latino consumers historically drink less alcohol than white consumers,” the report states. “Those groups represent 50% of Gen Z, yet were only 29% of the Baby Boomer generation.”
The takeaways from Rabobank’s research provide succour to brand owners bruised by the dominant narrative. “Companies need to realise that knowing that Gen Z is drinking less is far less important than knowing why Gen Z is drinking less and, ultimately, which members of Gen Z are drinking less.”
The first recommendation, then, is to reposition brand marketing efforts to appeal to women – “women with college degrees, to be precise” – and to people of colour. Secondly, brand owners would do well to target their employee recruitment appropriately to the demographics they need to focus on.
One final suggestion – and this one comes from me – is to be wary of attention-grabbing headlines warning that the end of the world is near. Because, it’s not.
