The consumer preferences in the alcohol sector are shifting as individuals become more deliberate in their alcohol consumption habits, according to recent studies. Factors such as moderation, social occasions, value, convenience, and brand trust are major influences on customer behavior and the variety of products in the category.
Changes in Consumption Habits
There is a rising trend of moderation in alcohol consumption as customers are becoming more mindful of their spending and alcohol intake. In fact, total beverage alcohol (TBA) volumes in the 15 largest markets, including Australia, the US, Canada, Mexico, Brazil, France, Germany, Italy, Spain, the UK, South Africa, China, India, Japan, and Taiwan, saw a 3% decline last year after a 2% drop in 2024. It appears that consumers are opting to drink less per occasion, with the average number of alcoholic beverages consumed dropping from 4.4 in March 2024 to 3.9 in March this year. Despite this, global consumption volume remains more than 30% above the levels recorded in 2000.
These figures suggest that this trend of moderation is becoming a permanent fixture in customer behavior, rather than a temporary or trend-driven phenomenon. However, this pattern varies across different generations. For instance, only the boomer generation has shown a decrease in participation, frequency and intensity of alcohol consumption, driven by factors such as cost, fewer social occasions, and a desire for moderation. On the other hand, the proportion of Gen Z individuals in the drinking population has risen from 13% to 17%, with above-average participation noted in India and the US.
Catering to Evolving Preferences
Social occasions continue to be a significant driver of alcohol consumption, with 35% of consumers citing them as their main reason for drinking. Moreover, 52% of consumers prioritize flavor when choosing ready-to-drink (RTD) beverages. Over the past decade, product innovation has contributed to over half of the growth in beverage alcohol retail value, enhancing the demand for products like canned cocktails, hard seltzers, flavored malt beverages, and no- or low-alcohol products.
Trust in a brand also plays a crucial role in consumers’ willingness to experiment with new products. A staggering 77% of global consumers are more likely to trust a new product if it comes from a brand they are familiar with.
The beer category, encompassing both traditional beer and other beer-related products, has seen its share of total alcohol servings increase from approximately 46% in 2019 to over 50% in 2026, a trend projected to continue until 2035. Demand for social experiences, convenience, affordability, and new formats has led to beer alone increasing its share from around 44% to 47%.
Questions & Answers
What factors are influencing consumer behavior in the alcohol category?
Factors such as moderation, social occasions, value, convenience, and trust in the brand are some of the key influences on consumer behavior in the alcohol category.
How has alcohol consumption changed across different generations?
While the boomer generation has shown a decrease in alcohol consumption due to factors like cost and a preference for moderation, the Gen Z population has seen a rise in alcohol consumption, with particularly high participation in India and the US.
What role does brand trust play in the alcohol category?
Brand trust significantly influences a consumer’s willingness to try new products. Around 77% of global consumers are more likely to trust a new product if it comes from a brand they are familiar with.
