Canned beer and Generation Z: a relationship on the decline

It has been obvious for some time now that the drinking habits of Generation Z do not match those of previous generations. A 2023 Gallup poll from 2023 found that fewer Americans aged 18-34 drink alcohol than at any time in the past 22 years, and Billboard reported last year that music venues are suffering due to low alcohol sales. But beer sales in particular are a slightly different story, and the generation gap can only explain them to a certain extent. NBC reports that the beer industry is seeing its lowest sales in a generation, and a number of factors are contributing to the struggle.

Industry group Beer Marketer’s Insights (BMI) told NBC that beer shipments have fallen to levels not seen since 1999, a time period that aligns fairly well with the lifecycle of the craft beer boom. Indeed, Anchor Brewing’s closure in 2023 seemed to signal the beginning of a rocky new road ahead for the U.S. craft beer scene, with craft sales declining faster than their mass-market counterparts. But the bigger players are feeling it too: “It was a tough year for beer,” said BMI vice president David Steinman.

Ten years ago, grocery and liquor store shelves looked comparatively one-note; now there are so many more choices that it’s not a matter of choosing which beer to drink, but choosing which broad category of beverage to start with. Do you want to drink beer? Wine? Liquor? A canned tequila cocktail? A hard seltzer that tastes like orange cream popsicle? Hard drinks? Hard lemonade? Hard tea? Hard iced coffee? The mere existence of all these products means that each must work harder to elbow its way into consumers’ shopping carts.

“Some of the world’s largest soft drink and energy companies introduced sugar-sweetened alcoholic beverages to the market, all of which compete for the same drinking occasions as traditional malt and hops products,” Lester Jones of the National Beer Wholesalers Association told NBC.

However, the level of beer consumption in the U.S. does not actually translate directly into industry profits, nor does it reflect global trends. The price of beer, NBC notes, has increased at a rate that matches and sometimes exceeds the general inflation rate. On top of that, as consumers move away from mass-market brands like Bud Light, they often adopt more expensive brands, a phenomenon that led to the rise of Modelo Especial in 2023.

We are likely to continue to see this kind of dualism within the brewing industry through 2024 and beyond: fewer drinkers and a glut of microbreweries shrinking to levels that better match demand, but perhaps also higher profits overall as the palates of existing drinkers become more particular. Recent trends in beverages such as seltzer and RTD cocktails have not been enough to topple this dominant category; they have made it much more difficult for beer to stand out from the rest.