Gen Z Wants Flavorful Drinks. Here’s How Big Beer Is Trying To Attract Them

Beer and hot dogs are as patriotic as they get. However, when you open the cooler at your July 4th cookout, you may see fewer beers, with alternatives such as spiked seltzers, canned cocktails, and hard teas taking their place.

And you may blame the young people for it. According to NIQ’s Kaleigh Theriault, the youngest group of legal-age drinkers, Gen Z, ages 21 to 26, are “drinking completely differently than any other generation we’ve seen before.”

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“They’re new to drinking, and when they do, they tend to gravitate toward flavor-forward categories,” Theriault, an associate director of beverage alcohol thought leadership at the consumer intelligence firm, told CNN.

Gen Z Wants Flavorful Drinks. Here’s How Big Beer Is Trying To Attract Them

Smaller companies’ beverages dominate the landscape. E. & J. Gallo Winery’s High Noon reigns supreme in the spirit-based cocktail category; Mark Anthony Brands’ White Claw remains the best-selling spiked seltzer; and newer entrants, such as Surfside, a two-year-old brand that mixes liquor with iced tea or lemonade, are quickly gaining ground.

That’s a problem for Big Beer, dealing with flat sales, declining volume, and an inconsistent generation of younger drinkers who have abandoned the bottle or prefer anything other than regular beer.

In response, Miller Lite producer Molson Coors Beverage Company, Modelo brewer Constellation Brands, and heavyweight Anheuser-Busch InBev are among the biggest brewers widening their portfolio with delicious concoctions.

Fruit, in particular, has been a focal point because “it’s something that the consumer seems to be drawn to right now, and they want to drink something really good,” Theriault explained. Those flavors offer that.

Constellation drew inspiration from TikTok for its new beer, which is inspired by the “Corona Sunrise” cocktail, which combines tequila, Corona, orange juice, grenadine, and lime juice. The beer has taken off on the video-sharing app, with the most popular tutorial receiving roughly 14 million views.

Because it is illegal to sell a beer mixed with a spirit, Corona created its version to appeal to younger drinkers: the “Sunbrew Citrus Cerveza,” which is brewed with orange and lime peels, blended with the same juices, and mixed with a Corona Extra to mimic the sweet flavor of the cocktail counterpart.

“This new brew was created with the flavor-seeking Gen Z audience in mind, a group of drinkers known for their experimentation and mixing,” remarked Saúl Trejo, director of brand marketing at Corona. For now, the drink is only accessible in the northeastern United States, but if sales are strong, it may extend nationwide.

Sunbrew joins Constellation’s portfolio of Gen Z-oriented beverages, including Fresca Mixed and its malt-based beverages, Corona Refresca and Modelo Spiked Aguas Frescas. Both have fruity flavors and are selling well for the brand.

TikTok has also impacted Molson Coors’ newest boozy beverage, “Happy Thursday.” What is the schtick? It’s non-carbonated because “bloating that may come from carbonation is considered a top barrier” for younger drinkers, and the habit of “decarbonizing” drinks is gaining popularity on the app.

The “smooth, bubble-free” drink is available in four fruit varieties, including strawberry and black cherry. Its low alcohol concentration of 4.4% by volume fits another Gen Z desire. According to the brewery, the drink also comes in vivid packaging meant to “pop on social media.”

Happy Thursday, launched less than three months ago, is experiencing growth in sales and distribution, and feedback has been “extremely positive,” according to the company’s blog. The company may provide more information about its sales during its next earnings report, due in August.

Happy Thursday fits into the company’s goal, which began in 2019 when Molson Coors changed its name to reflect its expanding array of beverages other than beer. That includes hard iced tea, energy drinks, and the Simply Spiked line. Last year, it purchased Blue Run Spirits, a cult beloved high-end bourbon and rye whiskey company, as US spirit sales surpassed beer sales.

“In order to remain relevant, suppliers must evolve and follow where the consumer is trending — and right now, the consumer wants flavor,” NIQ’s Theriault said of their pivots. “Innovation is really important in the alcohol industry and ensuring that innovation is tied to the consumer trends is what’s right for business.”

Building ‘beyond beer’
Canned cocktails and spirits-based beverages have also aided Anheuser-Busch’s bottom line in the United States, particularly given Bud Light’s declining sales. Its aptly named “Beyond Beer” division currently accounts for $1.5 billion of its global revenue and is helping to recruit younger, legally aged drinkers.

Beer | Pixa Bay Image

Two standouts are NÜTRL, a tasty line of vodka seltzers, and Cutwater Spirits bottled cocktails. An Anheuser-Busch representative told CNN that Cutwater, which sells canned rum mai tais, vodka mules, and tequila palomas, has “steadily grown dollar sales double digits for five consecutive years” and is up 23% this year.

Gen Z Wants Flavorful Drinks. Here’s How Big Beer Is Trying To Attract Them

Still, Anheuser-Busch’s prospects are not sunny, especially when a beverage has the Bud Light label. Bud Light Seltzer sales are down 50%, according to trade newspaper Brewbound, surpassing a bigger drop in malt-based seltzers as drinkers turn to spirit-based beverages. The company debuted a new advertising campaign in 2023, only a few weeks before the Dylan Mulvaney scandal sank its parent brand’s sales.

Despite younger customers’ reluctance to purchase beer and low sales, Big Beer businesses are not facing an existential threat. According to one expert, the reverse is true.

“Young drinkers can now find just about any kind of drink in almost any kind of flavor practically whenever they want, and they get to choose from the most diverse collection of beverages that has ever existed — with and without alcohol,” Bryan Roth, an analyst for Feel Goods Company and editor of the alcohol beverage newsletter, Sightlines+, told CNN.

“These long-established, often historic businesses are adapting to the market. What’s really interesting is that consumers are increasingly taking the initiative,” he said.

SOURCE – CNN