Circana Reports Gen Z Is Driving Variety and Innovation in the Beverage Alcohol Market

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Chicago, April 08, 2024 (GLOBE NEWSWIRE) — Circana™, the leading advisor on the complexity of consumer behavior, has released new insights on the beverage alcohol industry. The report, State of the CPG Beverage Alcohol Industry, highlights a growing consumer appetite for variety. Gen Z consumers aged 21-26 are leading the charge, propelling innovation in flavor profiles, packaging, and product formats. The report explores factors driving demand and identifies key growth opportunities in the beverage alcohol market.

One category that continues to hold broad appeal is ready-to-drink (RTD) cocktails and hard seltzers. Despite a slight softening in sales, these convenient offerings remain widely popular across different age groups and household income cohorts. The RTD category has more than tripled since 2018, reaching $10.3 billion in sales in 2023.

Variety packs stand out as the top-selling RTD format, outselling single-flavor packs. To meet evolving consumer demands, brands are innovating with crossover products, with an increasing number of nonalcohol brands venturing into the beverage alcohol space. RTD cocktails that resonate with Gen Z consumers aged 21-26 often feature higher alcohol-by-volume content, are made by recognizable brands, and have packaging suitable for diverse occasions.

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“Today’s beverage alcohol consumers prioritize convenience and desire innovative experiences,” said Scott Scanlon, executive vice president of Alcoholic Beverages at Circana. “Exciting flavor profiles will remain a key driver of innovation in this space. Brands that want to remain competitive should explore opportunities to elevate their offerings, incorporating premium ingredients and packaging.”

There is a noticeable trend among consumers shifting from value to premium options in both the beer and wine categories. Gen Z consumers aged 21-26 tend to prefer sparkling wines and those with fruity or sweet notes. In the beer category, sales remain robust, particularly in the convenience channel. Gen Z consumers aged 21-26 also show a preference for a variety of beer options, including flavored alternatives, Mexican imports, and economy brands.

​​Among all food and beverage departments, beverage alcohol has experienced the least inflation in recent years. This stability presents an opportunity for beverage marketers to emphasize value, enhance in-store experiences, and increase engagement through store apps and social media channels.

To capitalize on holidays and everyday celebrations, marketers should remind consumers of the role beverage alcohol can play in these moments. The use of high-quality ingredients, unique flavor profiles, and innovative packaging is key.

About Circana
Circana is the leading advisor on the complexity of consumer behavior. Through unparalleled technology, advanced analytics, cross-industry data, and deep expertise, we provide clarity that helps almost 7,000 of the world’s leading brands and retailers take action and unlock business growth. We understand more about the complete consumer, the complete store, and the complete wallet so our clients can go beyond the data to apply insights, ignite innovation, meet consumer demand, and outpace the competition. Learn more at circana.com.

*Source for all data: Circana OmniMarket™, 52 weeks ending Dec. 31, 2023

Circana Media Contact
Shelley Hughes
[email protected]
312-731-1782

CONTACT: Shelley Hughes Circana +1 312-731-1782 [email protected] 

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