Gen Z preferences are influencing alcoholic beverage trends in 2024.
Gen Z is gravitating toward the flavored alternative “beyond beer” category, and subsequently, hard teas and convergence brands — i.e. Monster Beast Unleashed, Arizona Hard, etc. — are seeing growth, noted Michelle Abdollah, category manager of alcoholic beverages for Extra Mile convenience stores, which operates 1,070-plus stores in 10 states.
Meanwhile, the beer category is showing soft numbers year-over-year, Abdollah noted. Indeed, beer case sales rolled in flat (down 0.5%) for the 52 weeks ending Dec. 31, per Circana.
“There continues to be a decline in beer drinkers as new drinkers are gravitating more towards flavored alternative beverages or non-alcs,” she said.
Gen Z and millennial generations are driving the non-alcoholic beer trend.
“Today’s customer is opting for healthier and functional beverage alternatives, and brands are reacting with product innovations across the 0% ABV (alcohol by volume) beer category,” noted Lorraine Mackiewicz, manager at Clarkston Consulting.
“Specifically, Gen Z customers are considered the ‘least alcohol-consuming generation in history’ as they prioritize better-for-you beverages to complement their healthier lifestyle aspirations,” Mackiewicz said.
Still, non-alcoholic beer is a small fraction of the beer market. Mackiewicz advised that retailers considering adding non-alcoholic beer start with a few small brand features to gauge the interest of their shopper base.
When it comes to regular beer, Abdollah expects continued growth in imports in 2024.
“There is a large crossover with Hispanic consumers and flavored alternatives, and we are continuing to see new brands emerge targeting this audience specifically,” she said.
Abdollah also sees higher ABV craft beer trending.
Wine & RTD
On the wine front, Abdollah sees wine-based cocktails dominating the category, and a premiumization of wine. “Canned wines are becoming a thing of the past, however there’s continued growth of tetra due to (the packs) being resealable, convenient for travel and lightweight,” she said.
Spirits-based hard seltzers had a 104.6% rise in dollar sales and a 99.1% climb in case sales for the 52 weeks ending Dec. 31, 2023, per Circana. Premixed cocktails also trended upward, increasing 57.1% in dollar sales and 56.5% in case sales.
Abdollah sees the hard seltzer segment leveling off as ready-to-drink (RTD) cocktails climb.
“High Noon is dominating the RTD cocktail space, and we have others now entering to mimic this category leader,” Abdollah said. “Craft cocktails are becoming more premium and elevated than before, and this segment is skyrocketing as customers are noticing they can purchase an RTD cocktail for a third of the price you pay for out at the bars.”
Functional alcoholic beverages are also on the rise, like hard kombucha and fortified seltzer, as they offer a more health-forward option, Mackiewicz said, adding, “Fortified seltzer is a great example of how lines are blurring across beverage types in areas such as hydration, vitamins and alcohol.”