Following boom times during the Covid-19 pandemic, the U.S. alcohol industry now faces a difficult period. Many reasons exist for this prolonged sales dip. Among the most cited is low levels of consumption among the youngest generation of legal drinking age, Gen Z.
Generally, Gen Z is defined as those born between 1997 and 2012. They are roughly 14 to 29 years old. Of course, not all Gen Zers have already reached legal drinking age. But more than enough are LDA for the data to be meaningful.
A 2024 study by Gallup researchers found that 64% of LDA Gen Z in America had not consumed alcohol in the prior six months. Another Gallup poll that year discovered that 65% of adults under 35 years old considered alcohol unhealthy.
These studies understandably set off alarm bells throughout the industry. However, polls in the past year actually indicate that Gen Z drinking is gradually on the rise. So what exactly is happening?
“There’s a lot of misconceptions about Gen Z with the idea of them being labeled the ‘sober generation’ and that they don’t drink,” says Jay Needham, Global Senior Brand Director for Tequila Cazadores & Agave. “In reality, what we are seeing is that they’re drinking differently, not disengaging altogether.”
Echoing this sentiment is Nick Weiland, brand director at Shiner Beer, the 116-year-old Texas beer brand that recently launched Shiner Bock Non-Alcoholic.
“Gen Z is largely in search of a balanced lifestyle,” Weiland says. “For some, that means fully embracing the sober-curious movement, while others simply enjoy mixing in an NA beverage now and then. Of the 19% of Gen Z not drinking any alcohol, 52% are alcohol-free because they just don’t want to drink alcohol. N/A beers are appealing to Gen Z because they allow for moderation without disrupting their lifestyle.”
Generational Factors
Timing is a huge factor with Gen Z. Perhaps more than any other age group, they have been shaped by Covid-19. The pandemic and lockdowns struck during their formidable years in high school, college and early 20s.
“Gen Z (21+) came of age during Covid, shaping lower social alcohol exposure,” says Zach Poelma, SVP of Supplier Strategy & Insights at Southern Glazers.
In other words, when you did not spend your early 20s in bars and restaurants drinking with friends, you feel less pressure to consume alcohol now.
Agreeing with this take is Justin Pincus, managing director of QuestBrand by the Harris Poll: “Gen Z approaches alcohol as a conscious, situational choice rather than a default. They are gravitating toward moderation, favoring RTDs, lower-ABV options, and premium products they buy less frequently but feel aligned with. This mindset is shaped in part by Covid-era socialization, which disrupted traditional bar culture and normalized smaller, more intentional gatherings, alongside higher anxiety levels and a stronger focus on mental and physical wellness. Alcohol is no longer assumed; it is a choice, and brands have to earn that choice through relevance, trust and value.”
Pincus brings up an important point about Gen Z: They are an anxious generation. Raised by constant self-sharing and doomscrolling on social media, and exacerbated by the pandemic and other recent troubling geopolitical events, Gen Z is very self-conscious and nervous. And alcohol is not exactly the cure for anxiety. Much the opposite, Gen Zers often lament the “hangxiety” of alcohol: the elevated anxiety they feel during a hangover.
Which is partly why that generation prefers the calm of cannabis.
“Cannabis and THC beverages are emerging as alternatives, seen as more functional and controllable ways to relax or socialize without hangovers or health risks,” says Poelma. “Cannabis and THC beverages are redefining ‘social drinking’ for Gen Z, offering functionality. However, their long-term adoption will also depend on how laws evolve.”
This last point is important, given the recent closing of the loophole in the 2018 Farm Bill that allowed for nationally distributed THC drinks (as discussed elsewhere in this issue).
Gen Z also came of age as recreational cannabis laws passed in states across the country. Thus, younger Americans are more destigmatized to THC than older generations.
Additionally, Gen Zers believe pot is a healthier alternative to alcohol. Whether or not that is true, it is relevant in terms of consumer trends. The youngest LDA generation, in general, is health focused.
“Health and mental wellness are central to how this generation approaches alcohol, with growing awareness of its impact on sleep, anxiety and productivity,” says Tanya Cohn, Marketing Director for the Lucas Bols Non Alcoholic Portfolio. “This is a long-term buying pattern, not a passing trend. Gen Z is forming drinking habits around flexibility and moderation from the outset, which is fundamentally different from previous generations.”
Many in the industry have pointed to this as a defining feature for Gen Z.
“They prefer spirits with fewer additives, low sugar and reduced impact on the body,” says Poelma.
Unlike Millennials, Gen Z has hardly known a time without ubiquitous internet and social media. They rely on TikTok and Instagram for most of their information.
“Gen Z expects to discover products digitally before they ever step into a store, so engaging the right social and online touchpoints can help drive foot traffic,” says Needham.
Data collected by Southern Glazer’s supports this hypothesis. Gen Z is “62% more likely to buy products advertised on social media, 84% more likely to be influenced by creators, 50% more likely to engage directly with brands online,” reports Poelma. “Gen Z’s purchase decisions are heavily shaped by digital influence, so liquor stores can leverage this by spotlighting trending brands, collaborating with local influencers and creating in-store experiences that are ‘Instagrammable’ and share-worthy.”
Part of the appeal of social media marketing is that it does not come off as commercial advertising. Gen Z is repelled by traditional ads, and responds better to content, brands and products that reflect authenticity.
“QuestBrand by The Harris Poll shows they are intentional shoppers who move quickly toward brands that feel culturally relevant and authentic, and just as quickly away from those that do not,” says Pincus. “They are less loyal, more experimental, and far more willing to trade brands based on price, values or relevance. In many ways, Gen Z is buying with purpose, not routine.
What Does Gen Z Drink?
Given all these cultural and generational factors, what exactly is Gen Z drinking?
“Gen Z drinks across many categories (spirits, wine, beer, non-alcoholic), favoring convenient, flavorful, low/non-alc options like RTDs, hard seltzers, kombucha and functional drinks (adaptogens, caffeine), showing category promiscuity unlike older generations loyal to specific drinks (whiskey, craft beer),” says Poelma of Southern Glazer’s. “They balance this with wellness trends, seeking healthier choices, mindful drinking (low-cal/sugar, non-alc), but also engage in spirits and partying, driving innovation in spirits and non-alcoholic alternatives, reflecting a desire for authenticity and personalized experiences over traditional brand loyalty.”
“Gen Z choices are mainly driven by brand values, flavor, convenience, experiences and are highly influenced by social media,” he adds.
RTDs and nonalcoholic products stand out as the most linked with Gen Z. Both categories continue to proliferate into the mainstream.
“As non-alcoholic options become standard on menus and shelves, the category is shifting from experimentation to normalization,” says Cohn. “We see this firsthand across a broad range of on-premise accounts — from concert venues and nightclubs to premium dining outlets like steakhouses — where non-alcoholic aperitivo-style serves such as Fluère Spritz or Pallini Limonzero Spritz are increasingly treated as core menu offerings, not alternatives.”
Expect further normalization of nonalc in 2026.
“The growth in NA beer has been steady and sustained, suggesting this is becoming a more established and long-term trend,” says Weiland. “As the movement for more balance and moderation evolves, consumer preferences may shift, but we think having a non-alcoholic option will become a standard practice.”
“Given that 43% of Gen Z says that they are more likely to try a new drink product if it is marketed to align with the sober curious lifestyle, we expect even greater competition in the category,” he adds.
As for RTDs, “The portability and convenience of RTDs makes them the perfect option for community-first activities and social gatherings, something that we know is extremely important to this generation,” says Needham. “According to Bacardi’s recent Cocktail Trends Report, some 85% of consumers say they wish they had more time to spend with the people they care about. For Gen Z, that means festivals, sporting events, etc. RTDs offer the convenience of a perfectly mixed cocktail.”
“The RTD boom might have accelerated during the pandemic, but its staying power is rooted in convenience and consistency, both of which Gen Z prioritizes,” Needham adds. “When Tequila Cazadores launched our RTD line in 2021, there weren’t many high-quality canned cocktails made with real tequila. Today, the category is crowded, but that reinforces how foundational it’s become to younger consumers’ drinking habits.”
Helping fuel the booms of RTD and nonalc is an improvement in the quality and flavors of both categories. This is especially important for Gen Zers.
“We expect flavor exploration to remain a powerful entry point for Gen Z,” says Needham. “This generation is curious and open, but still values balance and quality, which is pushing the industry to think differently about how flavor, format and occasion come together in a way that feels intentional rather than excessive. Ready-to-drink cocktails will continue to play an important role in that evolution, offering an accessible, high-quality way for Gen Z to explore new flavors in formats that fit naturally into their social lives.”
Adds Cohn, of Lucas Bols, “Gen Z is highly flavor-driven, which is why premium non-alcoholic spirits built with real craftsmanship are gaining traction.”
Another category buoyed by recent improvements in quality and flavor is THC drinks, another Gen Z favorite. This has helped increase the foot traffic and sales for younger consumers in liquor stores.
“Shoppers are shifting to buying both THC Drinks and bev alc, and those who purchased both THC and bev alc on average spent 2.5 times on bev alc, which is creating a small but valuable consumer segment,” says Poelma.
What Can Liquor Stores Do?
Effectively stocking products like THC beverages and other categories preferred by Gen Z is a simple way to attract these key customers.
“Liquor stores win Gen Z by normalizing non-alcoholic wines and spirits rather than treating them as a niche,” says Cohn. “Clear merchandising around flavor, cocktail usage and occasion, especially familiar drinks like spritzes or margaritas, certainly helps drive trial. For this generation, discovery and experience matter more than abstinence messaging.”
To drive discovery and experience, consider in-store tastings, classes and other education opportunities.
“Curiosity about origin, production, and value (craft, local, premium) drives purchase decisions,” says Poelma. “Provide approachable, bite-sized learning (tastings, digital content, in-store guides) to demystify wine and spirits to build confidence. Highlight transparency (origin, production, sustainability) and offer formats that feel accessible (smaller bottles, RTD wine spritzers).
“Use social media, creators and experiential activations to make [alcohol categories] relatable,” he adds. “Storytelling around heritage, craft and authenticity can bridge the gap between education and emotional connection.”
Leaning into social media remains important.
“Eye-catching, bold, and social media-friendly packaging resonates with Gen Z’s desire for products that stand out and feel shareable,” Poelma says.
Another tip recommended is the age-old strategy: liquid to lips.
“Off-premise locations that allow for product trials and offer new and exciting non-alcoholic options will be better positioned to attract Gen Z consumers,” says Weiland.
Of course, Gen Z will not stay in their 20s forever. As with all generations, their tastes will expand and evolve as they grow older and make more money.
The industry should “track how Gen Z’s preferences evolve as income levels grow and [they] become more financially independent, host more at-home occasions and shift from im-pulse RTDs toward more intentional categories,” says Poelma. “Also, observe how their behavior changes once they move out of their parent’s homes and start building families of their own.”
This all points to a future further defined by our youngest consumers.
“Gen Z may not yet dominate overall spending, but QuestBrand Movers consistently shows they act as a leading indicator for where brands and categories are headed,” says Pincus. “What resonates with Gen Z today often becomes mainstream a year or two later. The real story is not just how much this generation is buying now, but how quickly they can elevate or sideline brands based on cultural relevance alone.” •