Meeting the Changing Alcoholic Beverage Consumption Trends

Insights from NIQ echo the findings as its research shows that Gen Zers, who "tend to consume alcohol in social settings and group gatherings," prefer hard seltzers, RTDs and flavored malt beverages (FMBs). Hard seltzers top the list, in fact, with 34% of 21-plus Gen Zers saying they lean toward hard seltzers when purchasing alcohol.

Tia Wines, director of marketing for Carrollton, Texas-based BuzzBallz LLC/Southern Champion, which in 2010 launched BuzzBallz RTD cocktails, noted that Gen Z consumers are more likely to show interest in spirit-based seltzers and ready-to-drink products than the traditional categories of alcoholic beverages. "[They] are looking for innovative products that offer variety and are more likely to break away from the traditional products to try something new," she said.

Sean Colman, national channel manager for The Boston Beer Co., whose brands include Samuel Adams, Dogfish Head, Angry Orchard Hard Cider, Truly Hard Seltzer and Twisted Tea Hard Iced Tea, also sees "Beyond Beer" products such as flavored FMBs and RTDs trending. Beyond Beer is about a 20% share of sales in c-stores and it's almost 50% of new entrants into the category, he said, adding that Gen Z is entering the category more often through FMBs and seltzers.

Benjamin Hoffmeyer, vice president of marketing and merchandising for Spicewood, Texas-based Texas Born (TXB), is watching these trends play out in the retailer's c-stores.

"We're seeing a return to malt beverages, as well as trends toward strong, exotic, unique flavors. Examples include tropical-infused spiked lemonades [and] Hispanic-inspired flavor combinations [like] pineapple, guava, hibiscus and margarita flavors," he said, also noting increased interest in drinks cobranded with Topo Chico, Jarritos, Monster Energy and Malibu Rum.

The Impact on Beer & Wine

There's no doubt that FMBs and RTDs are taking a bite out of the traditional beer and wine categories. One example: The majority of Boston Beer's sales now come from products in the Beyond Beer category, Colman told Convenience Store News.

However, Gen Zers' embrace of FMBs and RTDs doesn't mean c-stores should abandon their beer and wine inventory — it's just a matter of selecting the right product mix.

"In the beer category, sales remain robust, particularly in the convenience channel," the Circana report stated, noting that 21- to 26-year-old consumers "show a preference for a variety of beer options, including flavored alternatives, Mexican imports and economy brands." These shoppers also "tend to prefer sparkling wines and those with fruity or sweet notes."

Hoffmeyer sees import and craft beer taking market share from domestic beer sales, which he said are declining. "Imports and malt beverages continue to take shares younger guests are looking for unique flavor profiles. Craft seasonal flavors continue to resonate with younger consumers," he explained. He also reported that TXB is seeing sales growth in lighter wines such as rosé and in wine-based high-alcohol drinks such as Big Swig.

While recent data has shown that more Americans are drinking less and favoring nonalcoholic beverage options more, retailers and suppliers aren't seeing a ton of action around the "sober curious movement" yet in c-stores. "We have seen some growth in nonalcoholic beers, but the category is still a small base," said TXB's Hoffmeyer.

Staying Relevant in an Evolving Category

Understanding how Gen Z preferences are reshaping the BevAl market is important, but that knowledge won't translate to sales unless retailers merchandise and market alcoholic beverages in ways that will attract and build loyalty with Gen Z consumers. The following suggestions can help c-stores become a destination for young alcoholic beverage shoppers:

Boost Visibility

BuzzBallz's Wines advised that "RTDs are continuing to drive growth within the convenience channel, warranting increased visibility on-shelf and [in] sold cold space for approachable and growing brands that are driving sales and trips to c-stores."

Hoffmeyer also stressed the importance of visibility, noting that TXB is making it easier for guests to see labels on packaging and grouping like products in the same vault door to create an easier shopping experience for its customers.

Call Out New & Unique Items

Using new item signage and dedicating placement in alcohol planograms for rotating seasonal flavors and local Texas craft beers are approaches Hoffmeyer said are working for TXB. "LTOs [limited-time offers] have done well at TXB Stores as guests look for different types of flavors throughout the seasons," he added.

Don't Ignore Female Gen Z Shoppers

"One of the biggest changes — and emerging trends — is the power of the female shopper," Boston Beer's Colman emphasized. "Female shoppers now make up about two-thirds of Gen Z beer and Beyond Beer shoppers, whereas previous generations skewed two-thirds male. So, it's important for operators to adjust to this new dynamic."

That means thinking about inventory that reflects female shoppers' wants and needs, "which are largely centered around the Beyond Beer category," to increase impulse sales and encourage them to return, he said, pointing out that "they have higher expectations to find their brands on the floor, and they make more in-store decisions compared to male shoppers."

Beer caves, Colman added, are also important to female shoppers. "A poorly designed cave will chase the Gen Z female shoppers out of the store, while a female-designed cave can inspire long-term loyalty," he cautioned.