The Beverage Z-Evolution

July 2021
Adult beverage brands
know that winning with
Gen Z will be critical to
achieving sustained
growth…

2
…and while Gen Z
consumers are still
mostly single with
limited purchase power,
they won’t stay that way
forever – and the
industry must prepare

3
There’s a growing consensus that young shoppers drink less alcohol
and are more deliberate – driving a beverage Z-evolution

Sources: AdWeek, June 2021; The Food Institute, May 2021; China Daily, June 2021; Flux, January 2021,
FoodDive.com, June 2021
When young shoppers do drink alcohol, many are mindful of their
consumption or actively limit their intake
Attitudes Regarding Alcohol Consumption

4 / 10 Gen Z & Millennial drinkers are mindful of how much they drink

3 / 10 Gen Z & Millennial drinkers are limiting alcohol intake

Source: Numerator Survey, June 2021, Q6_Which of the following, if any, describe your attitude regarding alcohol and/or how you consume alcohol?
Base: Total (n=755), Gen Z Non-Drinkers/Light Drinkers (n=59), Gen Z Drinkers (n=348), Millennial Drinkers (n=348)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ 5
Letters indicate significant testing at 95% LOC
Gen Z finds alcohol less appealing overall, and has greater concern
for mood and social impacts than Millennials
Why Limit Alcohol Intake? Gen Z Non-Drinkers/Light Drinkers (b) Gen Z Drinkers (c) Millennial Drinkers (d)

26%
I want to avoid hangovers 59% b
62% b
30%
It saves me money 38%
39%
31%
I’m concerned about long term effects of drinking alcohol 32%
29%
39% cd
I avoid alcohol for health or wellness reasons 23%
25%
54% cd
Alcohol doesn’t appeal to me 18% d
7%
19%
I’m concerned about the effects of alcohol on my mood 28% bd
19%
11%
Don’t want photos/videos of me under the influence of alcohol to end up on social media 20% bd
12%
8%
It helps me stay alert 20% bd
9%
25% cd
Drinking alcohol goes against my personal or religious beliefs 5% d
1%

Source: Numerator Survey, June 2021, Q7_Which of the following, if any, describes why you [Don't drink or are mindful of how much you drink / limiting alcohol intake]?
Base: Gen Z Non-Drinkers/Light Drinkers (n=210), Gen Z Drinkers (n=194), Millennial Drinkers (n=203)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ | Letters indicate significant testing at 95% LOC 6
These attitudes are resulting in fewer 21+ Gen Z consumers
purchasing alcohol than Millennials
% Buying Alcohol by Generation

90%

84%

Gen Z 21+
-6%
fewer Gen Z shoppers
purchase Alcohol
Millennials

Source: Numerator Insights, Advanced Trended Metrics, 52WE 5/31/21 7

21+ Gen Z consumers also buy alcohol less often, spending $150 less
per year

40% less Alcohol spend 5 less Alcohol trips

for Gen Z 21+ than Millennials for Gen Z 21+ than Millennials

Alcohol Spend per Year Alcohol Trips per Year

$387 18.7

13.4
$233

Gen Z 21+ Millennials Gen Z 21+ Millennials

Source: Numerator Insights, Advanced Trended Metrics, 52WE 5/31/21

The gap between Gen Z & Millennial alcohol purchasing exceeds the
gap in non-alcoholic purchasing, confirming an alcohol-specific trend

27% less NA Bev spend 14 less NA Bev trips

for Gen Z 21+ than Millennials for Gen Z 21+ than Millennials

NA Beverage Spend per Year NA Beverage Trips per Year

$736
85.1
$539

71.0

Gen Z 21+ Millennials Gen Z 21+ Millennials

Source: Numerator Insights, People Scorecard, 52WE 5/31/21; *NA = Non-Alcoholic Bev (e.g. Soft Drinks, Juice, Water, Sports, Energy etc)
Gen Z consumes wine and beer less regularly than Millennials,
but hard bev, champagne, & low/zero ABV are more popular
Alcoholic Beverages Consumed Regularly
Gen Z Drinkers (c) Millennial Drinkers (d)

Wine 50%
59% c
Beer 43%
58% c
47% Red wine less likely,
Distilled spirits 47% fruit flavored wine
Hard seltzers 43% and wine coolers
38% more likely for Gen Z
Hard lemonade, iced teas, or juices 42% d
23%
Hard cider 26%
25% Bourbon/scotch/whiskey
Sparkling wine 19% less likely, vodka, tequila,
16%
20% cognac more likely for Gen Z
Ready-to -drink canned cocktails 14%
Champagne 19% d
13%
Fermented beverages 11%
9%
Hard sodas 11% d
6%
Prosecco 9%
8%
Low or zero ABV alternatives 6% d
2%
Other 2%
1%

Source: Numerator Survey, June 2021, Q1_Which of the following alcoholic beverages do you drink regularly?
Base: Gen Z Drinkers (n=348), Millennial Drinkers (n=348)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ 10
Letters indicate significant testing at 95% LOC
Within key alcohol segments, Gen Z drinkers are spending a higher %
on sweeter options especially FMB, cognac, cordials, and blush wine
Alcohol Market Share Gen Z Millennials
% of Spend By Generation

Cognac, 149 Index

Flavored Malt Cordials, 122 Index
Blush, 165 Index
Beverages (FMB), Tequila, 118 Index
Rum, 115 Index
Sparkling, 105 Index
180 Index
Vodka, 113 Index

43.2% 41.9%
34.9% 35.2%

19.3% 21.0%

2.0% 1.6%

Beer/FMB/Hard Seltzer Spirits Wine RTD Cocktails & Mixers

Source: Numerator TruView Market Share. 52WE 6/6/2021

When going non-alcoholic, juices, sports drinks, and CBD /
Cannabis-infused beverages are consumed more regularly by Gen Z
Non-Alcoholic Beverages Consumed Regularly
Only categories with significant differences shown

Gen Z Non-Drinkers/Light Drinkers (b) Gen Z Drinkers (c) Millennial Drinkers (d)

Bottled Water, Soda, Tea, Energy

Drinks, and Sparkling Water are
76% d equally popular among Gen Z and
71%
66% 64% cd Millennials
51% d 55%
48%47% 47% 47%
41% 41%
36% d
33% 34% b
32%
28% 26%28% 27%
20% 22% d 18%
18% 14% 16%
13% 12% b 10% d
7% 9% 6% 8% bd 7% bd
5% 1% 3% 1% 4% b

Bottled Juices Sodas Tea Sports Enhanced/ Energy Bubble tea/ RTD Fermented Mocktails/ Cannabis CBD
H2O (hot or cold) drinks flavored/ drinks Boba coffee bev (e.g. Non-alc -infused -infused
sparkling H2O kombucha) cocktails bev bev

Source: Numerator Survey, June 2021, Q2_Which of the following non-alcoholic beverages do you drink regularly?
Base: Total (n=906), Gen Z Non-Drinkers/Light Drinkers (n=210), Gen Z Drinkers (n=348), Millennial Drinkers (n=348)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ 12
Letters indicate significant testing at 95% LOC
Fruity flavors, trendy wellness benefits, new segments of RTD, + low/
no Alc options are catering to Gen Z’s tastes + intensifying competition

Source: Beverageindustry.com, Various online manufacturer sites 13

 Following these trends, Smirnoff Ice, Mike’s Hard, Seagram’s, &
Malibu are the biggest winners with Gen Z among BevAlc brands
Mike’s and Smirnoff
Instagram posts have Top Over- Share of Total
Index to
colorful imagery which Indexing Alcohol Spend
promotes fun / Millennials
Brands Gen Z
socialization and
encourages personal Smirnoff Ice 1.0% 247
expression, as well as
featuring their wide
Mike's Hard 1.2% 237
variety of “fruity” flavors Seagram’s 0.8% 223
Malibu 0.9% 214
Stella Rosa 1.7% 192
Coors promotes
environmental causes Baileys 0.7% 185
and an active, outdoorsy Natural Light 1.0% 168
lifestyle Twisted Tea 0.7% 156
Modelo 2.5% 153
Coors 3.3% 151
Jack Daniels 2.2% 147
Barefoot 1.9% 144
Hennessy 1.4% 143
Svedka 0.5% 136
New Amsterdam 0.8% 134

Source: Numerator TruView Market Share. 52WE 6/6/2021. Limited to brands with >0.5% share among Gen Z. 14
Additional Source: Instagram
 While major brands like Fireball, Miller, Budweiser and
Jim Beam have some ground to make up with Gen Z drinkers

Budweiser and Miller

posts feature more
traditional Americana
themes centering around Top Under- Share of Total
Index to
sports & meals Indexing Alcohol Spend
Millennials
Brands Gen Z Buyers

Fireball’s distinct flavor

Fireball 0.5% 55
and reputation as Miller 2.1% 71
primarily for shots may Jim Beam 0.8% 84
not resonate as well with
more moderate Gen Z Crown Royal 1.5% 86
drinkers Blue Moon 0.5% 88
Heineken 0.8% 89
Budweiser 1.2% 90
Bud Light 4.0% 93
Michelob Ultra 2.0% 97

Source: Numerator TruView Market Share. 52WE 6/6/2021. Limited to brands with >0.5% share among Gen Z.
Additional Source: Instagram 15
Gen Z is expecting
different things from
their beverages,
impacting usage
occasions

16
While drinking alcohol, fun, social connection + approval, and buzz
are more important to Gen Z – while Millennials mostly want to relax
Attributes Considered While Choosing Alcoholic Beverage
Only top responses and attributes with significant differences shown

Gen Z Non-Drinkers/Light Drinkers (b) Gen Z Drinkers (c) Millennial Drinkers (d)

Relaxation (48%) is the top benefit

49% d
sought by Millennials (#2 for Gen Z),
47% 48% while Having a Good Time is #1 for
45% bd
36% 38% Gen Z, but Brand I always drink was
36% 37% b important to <30% of both groups
29% 28%
25%
21% d
17%
12% 14% 12% d11% d 12% d
5% 7% d 7% d 6% d
3% 5% 3%
2% 3%

Helps me relax Helps me have a Gives me a buzz Is a brand I always Helps me connect Boosts my energy Helps me focus or Offers nutritional or Is something others
good time drink with others stay productive wellness benefits will approve of

Source: Numerator Survey, June 2021, Q4_Which of the following attributes, if any, do you consider when choosing an alcoholic beverage?
Base: Total (n=755), Gen Z Drinkers (n=348), Millennial Drinkers (n=348)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ 17
Letters indicate significant testing at 95% LOC
When buying non-alcoholic beverages, Gen Z’ers are more likely to
seek a go-to brand that delivers feel-good + social benefits
Attributes Considered While Choosing Non-Alcoholic Beverage
Only top responses and attributes with significant differences shown

Gen Z Non-Drinkers/Light Drinkers (b) Gen Z Drinkers (c) Millennial Drinkers (d)

Hydration (57%) and

Energy Boost (35%) are
56%57%58% the top attributes sought
across groups
40% b
35% 35% c
30%30% d 32%31%
b b
27% 29%28% 29%32% 26%28% 26%27%
24% 22%
23% 20% 21%
15% d
11% 9% 9% bd 7% bd
4% 4% 3% 3%

Is hydrating Boosts my Go-to brand Low / No Sugar Fits my diet Helps me lead a Helps me focus Offers nutritional Helps me have Helps me Makes me feel
energy healthy lifestyle or stay or wellness a good time connect with classy or
productive benefits others sophisticated

Source: Numerator Survey, June 2021, Q5_Which of the following attributes, if any, do you consider when choosing any non-alcoholic beverage?
Base: Total (n=906), Gen Z Non-Drinkers/Light Drinkers (n=210), Gen Z Drinkers (n=348), Millennial Drinkers (n=348)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ 18
Letters indicate significant testing at 95% LOC
Gen Z drinkers associate wine and mixed cocktails with dining + special
occasions, while beer competes with many canned drinks for socials
Perceptual maps identify the
Gen Z Drinking Occasions
associations between a particular Small 2Get Together
Meal at home
beverage and a particular occasion
Tea
1.5
Juice
Work/focus/study time
Wine Relaxing at home
1
Meal at a restaurant Soft drink
Flavored/enhanced/sparkling water
Celebrations & Rewards

0.5

Tasks & Objectives

Low/0% ABV beverage Outdoor activities
0
-2 -1.5 -1 -0.5 0 Coffee 0.5 1 1.5 2
Sports drink
Treat myself Beer
-0.5
Mixed cocktail Hard lemonade, iced Cannabis beverage
Casual hangout CBD beverage
Special celebration tea, or juice
Champagne/sparkling wine
RTD cocktail
-1
Hard seltzer or soda Large event
Energy drink
-1.5
Shots of liquor

-2
19
Out in the Crowd
Source: Numerator Survey, June 2021, Q10_For each of the following occasions, which of the following beverages would you consider drinking? 19
Base: Gen Z Drinkers (n=194), Millennial Drinkers (n=203); *Blue dot = Beverage, Green dot = Occasion
Gen Z drinkers consume a wide range of drinks when socializing, while
Millennials prioritize beer, wine, and mixed cocktails for social events
70% Gen Z vs Millennials Social Drinking Occasions
Beer

60%

Beer is not the

50%
dominant go-to for Gen
Casual hangout with friends

Mixed cocktail
Beer
Z when socializing, as
Wine
it is for Millennials
40% Mixed cocktail
Hard lemonade, iced tea, or juice
Wine Millennial Drinkers
Hard seltzer or soda
30% Hard lemonade, Gen Z Drinkers
Hard seltzer or soda
iced tea, or juice
Shots of liquor
RTD cocktail
20% Champagne/ RTD cocktail
sparkling wine Shots of liquor
Champagne/ sparkling wine

10%

0%
0% 10% 20% 30% 40% 50% 60% 70%

Large event
20
Source: Numerator Survey, June 2021, Q10_For each of the following occasions, which of the following beverages would you consider drinking? 20
Base: Gen Z Drinkers (n=194), Millennial Drinkers (n=203)
Knowing how and
where to intercept
Gen Z drinkers
is key

21
Brand awareness can be achieved among Gen Z more effectively
through social media, influencers, & events than among Millennials

Source of Awareness for New Beverage Brands

Gen Z Non-Drinkers/Light Drinkers (b) Gen Z Drinkers (c) Millennial Drinkers (d)

Seeing a product on the shelf and

word of mouth are the top sources of
awareness for both generations of
young drinkers
64%
62%

59%

49%

42% bd
46%
41%

34%

29%
26%

26%
26%

26%
26%
25%

20%

19%

13% d

13% d
15%

12%
11%

11%
11%

10%
8%

8%
Seeing it WOM/ Ads on social media Passively browsing Ads on live TV Ads on streaming Actively searching Sponsored posts Event sponsorships
in-store Recommendations online video online or on social from influencers

Source: Numerator Survey, June 2021, Q15_How do you learn about new beverages or beverage brands?
Base: Total (n=906), Gen Z Non-Drinkers/Light Drinkers (n=210), Gen Z Drinkers (n=348), Millennial Drinkers (n=348)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ 22
Letters indicate significant testing at 95% LOC
Gen Z is most interested in Music influencers, and less focused on
Food / Cooking, Health, or Fitness as compared to Millennials

Types of Influencers Followed on Social Media

Gen Z Non-Drinkers/Light Drinkers (b) Gen Z Drinkers (c) Millennial Drinkers (d)

71% b
66% d
60% 63% d 60% b
55% 57%
52% 52% b 53% b
48% 49% 49% 50% b
46%
39% 37%
36% 36% 34% 33%

Food and cooking Music Beauty Health/wellness Fitness Fashion Pop culture

Source: Numerator Survey, June 2021, Q13_What types of influencers do you follow on social media?
Base: Total (n=291), Gen Z Non-Drinkers/Light Drinkers (n=73), Gen Z Drinkers (n=124), Millennial Drinkers (n=94)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ 23
Letters indicate significant testing at 95% LOC
Many young drinkers use social media to discover new products,
and they are mindful of a brand’s message and values

Perceptions Regarding Social Media

Top 2 Box: Agree Strongly + Somewhat Agree Gen Z Non-Drinkers/Light Drinkers (b) Gen Z Drinkers (c) Millennial Drinkers (d)

It’s possible to invest heavily but still ‘lose’ if

your message doesn’t resonate (some brands
which under-index with Gen Z actually out-
84% b
spend brands that over-index, on Paid Social*)
82%
77%
71% 70% 71%
65% 66% 66% 64% 66% b 66% bd
57% 59%
53%

I am careful to control what gets Photos/Videos of me posted on Photos/Videos of me posted on If I don’t agree with what a brand It’s fun to try new brands and
posted about me on social media. social media while under the social media while under the posts on social media, I won’t buy products I learn about from
influence of alcohol would negatively influence of alcohol would make it their products. influencers.
affect my reputation harder to get the job/career I want

Source: Numerator Survey, June 2021, Q14_TOP 2 BOX_How much do you agree or disagree with the following statements about social media?
Base: Total (n=906), Gen Z Non-Drinkers/Light Drinkers (n=210), Gen Z Drinkers (n=348), Millennial Drinkers (n=348)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ Letters indicate significant testing at 95% LOC; 24
*Paid Social ad spend reference = Numerator AdIntel YTD through 5/31/21; Includes Twitter, Facebook and Instagram; Paid Social ad spend as a % of brand sales
YouTube, Snapchat, and TikTok are more effective platforms for
reaching Gen Z drinkers pre- and post-shop than Millennials

Social Media Sites Used

Removed ‘Other’ and ‘None’
Gen Z Non-Drinkers/Light Drinkers (b) Gen Z Drinkers (c) Millennial Drinkers (d)

Staying Connected and Up-to-Date are the

82% b
81% b

79% b

top reasons for using social media for both

74% b

68% bd
74%

64% cd

Gen’s, but Gen Z follow influencers

(36%,129i) and seek to express creativity
60%

55% d

49% bc
(33%,143i) more than Millennials

46% bd
47%

43%
42%

41%
40%

33%

33%
27%

27%
26%

25%
25%

22%

18%
17%
17%

11%
8%

8%

6%
5%
3%
Source: Numerator Survey, June 2021, Q11_Which of the following social media sites do you use? Q12_What are some of your reasons for using social media?
Base: Total (n=906), Gen Z Non-Drinkers/Light Drinkers (n=210), Gen Z Drinkers (n=348), Millennial Drinkers (n=348)
Gen Z Non-Drinkers/Light Drinkers are defined as ‘having 1 drink a month or less’ 25
Letters indicate significant testing at 95% LOC
Platforms like TikTok and Pinterest feature a variety of user-
generated content related to beverages

26
 Completing the shopping journey, Gen Z are buying Alcohol more in
Mass and Club, and less at Drug, Liquor, & Online than Millennials

% of Alcohol Spend Index –

Gen Z 21+ vs Millennials

Mass 125

Club 115

Food 106

Gas &
91
Convenience

Drug 87

Dollar 79

Liquor 75

Online 54

Source: Numerator Insights, Shopper Profile, 52WE 5/31/21; *Dollar represents less than 1% of Alcohol sales for both groups 27
Gen Z are also buying non-alcoholic beverages in budget-friendly
channels - Dollar, Mass and Club - and less Online vs. Millennials

% of NA Beverage Spend Index –

Gen Z 21+ vs Millennials

Dollar 124

Mass 111

Club 111

Drug 106

Gas &
98
Convenience

Food 98

Online 47

Source: Numerator Insights, Shopper Profile, 52WE 5/31/21 28

What we’re Why it matters How you can
seeing to you take action

• Gen Z is drinking less alcohol than • Traditional media and messaging • Reach out to your Numerator Consultant
Millennials, and seeking more strategies will not connect most to understand whether your products or
experiential and social benefits effectively with Gen Z. stores are getting their fair share of Gen
from both alcoholic and non- Z dollars.
alcoholic beverages. • They are mindful of what your brand
stands for, and will reward those brands • Consider exploring Gen Z needs specific
• They are opting for sweeter whose message and point-of-view truly to your category further through survey,
beverages and a broader variety resonates and aligns with their own. to ensure you are positioned to win the
of beverages beyond traditional hearts and stomachs of Gen Z shoppers
types of beer, wine, and spirits • Their needs and preferences are now and in the future, as their purchase
(including CBD/Cannabis-infused). unique, so brands and retailers need to power grows.
continue evolving, innovating, and
• Social media, particularly diversifying, to ensure the right products • Understand the competitive landscape
influencers, present a unique are available to reach Gen Z drinkers in across media, especially social, to
opportunity to reach and activate order to win the occasion / trip, and their secure share of voice among Gen Z
Gen Z shoppers. loyalty. shoppers.
Will Carswell Julie Churi
Sr Consultant Sr Consultant

Alison Henley
Mitch Greene
Consultant
Research
Assoc.

Angelina Schiano
Research Manager

30