How Gen Z, Millennials, and Consumer Trends are Shaping the Future in the Healthy Beverage Market

25 September 2024

The Growing Demand for Health-Conscious Beverages

As consumers shift away from sugary and high-alcohol drinks toward healthier alternatives, the beverage industry is experiencing an increase interest in products that are better for your health than regular options. This includes options like low-calorie seltzers and zero-sugar soda’s. Non-alcoholic beverages are particularly popular among Gen Z, while health consciousness is also rising among Millennials.

Recent research by Simon-Kucher among the American population highlights this shift. While traditional alcoholic beverages see decline in interest, options like low-alcohol and low-calorie seltzers are booming. The data reveals that Gen Z leads the trend towards non-alcoholic drinks, with 42% opting out of alcohol. Gen Z shows a big increase compared to previous generations. Millennials also show growing interest in cutting back on alcohol, reflecting a broader move toward wellness-driven choices. Innova Market Insights also reported that European consumers are turning to non-alcoholic alternatives, with research showing an 8% rise in those who have increased their consumption of these beverages over the past year.

This shift in preferences presents an opportunity for brands to appeal to younger consumers who prioritize health, wellness, and authenticity in their choices. Brands must understand these evolving trends to thrive in today's beverage industry.

Key Consumer Trends Reshaping the Beverage Market

#1 The rise of non-alcoholic and low-alcohol beverages:

The "sober curiosity" movement continues to gain interest, especially among younger generations. Consumers are looking for products that replicate the taste and experience of alcohol without the downsides, including non-alcoholic beer, wine, and seltzers. Brands must carefully position and price these offerings to appeal to health-conscious drinkers while delivering on taste and experience.

#2 Zero-sugar and functional beverages:

Beyond alcohol, consumers are also moving away from sugar-sweetened beverages and embracing zero-sugar alternatives that provide healthier options. With consumers drinking less alcohol overall, but also drinking better, brands must now figure out how to market premium offerings. Consumers are looking for beverages that offer specific health benefits, such as improved focus, relaxation, or increased energy. They are willing to experiment with unique, premium products, but are looking for familiarity and perceived quality when going for familiarity brands.

#3 Premiumization and quality-driven choices:

Premiumization is a growing trend in the beverage market, where consumers are willing to pay more for high-quality or unique offerings. This is particularly true in the health-conscious segment, where superior ingredients and functional benefits play a big role in purchasing decisions. Brands can achieve premium positioning by focusing on high-quality ingredients, thoughtful design, and clear messaging that speaks to the wellness-focused consumer. Premium products in the healthy beverage space are about more than price. They’re about delivering value, trust, and authenticity.

Younger consumers are increasingly willing to spend more on high-quality, premium products. However, they demand transparency, quality ingredients, and brand alignment with their values. The challenge for brands lies in communicating this premium value in ways that resonate with both Gen Z and Millennials, who seek authenticity and a clear value exchange.

Brand Example: ST?LZ in the Dutch Beverage Market

ST?LZ has positioned itself as a leader in the growing hard seltzer beverage market in the Netherlands. By effectively tapping into key consumer trends such as the rise of low-alcoholic beverages, zero-sugar alternatives, and premiumization. Their hard seltzers offer refreshing flavors that replicate traditional cocktails while maintaining low alcohol content. Particularly through their new Mixed Classics line, which includes premixed options like gin & tonic and moscow mule. The brand mimics the taste and experience of traditional alcoholic spirits.

Furthermore, their commitment to high-quality ingredients and thoughtful design appeals to younger generations who prioritize authenticity and transparency, making St?lz a trusted brand in the premium beverage space. By engaging with the community through social media, St?lz strengthens brand loyalty, positioning itself as an attractive choice for health-conscious consumers in search of enjoyable, responsible drinking options.

How to Cut Through the Noise

This shift presents a challenge for major players: how to effectively communicate value to younger consumers who prioritize quality over quantity. As Gen Z and millennials express increased interest in reducing their alcohol consumption, the importance of value exchange becomes even more critical.Trend awareness and strategy are key to appeal these younger generations.

Key Strategies to Cut Through the Noise and Build Brands that Resonates with the Health-Conscious Consumers:

• Leverage authentic brand stories: Consumers crave authenticity. Customize your brand messaging to fit your audience values and lifestyle. Brands that communicate a genuine mission; whether focused on sustainability, community engagement, or health, can build deeper connections with their audience. Personalized branding can set your brand apart from competitors.
• Position as innovators, Not just sellers: In a crowded market, it’s not enough to follow trends, you need to predict them. Brands that position themselves as innovators wil draw attention. Try to stay ahead of market changes and proactive shift strategies. Align with the health-conscious consumers so you know what they want before they even know it.
• Transparency in ingredient and quality: Transparency is no longer optional. Consumers want to know exactly what they’re consuming, from ethical sourcing to the health benefits of ingredients. Clear, informative packaging and marketing that shows information about ingredients, sourcing, and health benefits can help brands stand out and helps building trust.
• Create unique brand experiences: Consumers are looking for memorable brand experiences, whether through innovative packaging or interactive digital campaigns, it can help your brand stand out.
• Community driven : Building a strong brand community is one of the best ways to ensure loyalty. Consumers want to feel like they are part of something bigger, especially when they believe in the values behind your brand!

How Can We Help?

The healthy beverage market is changing fast, and success requires more than following trends. Success requires a clear strategy and expert execution. To grab opportunities in the healthy beverage market, it’s crucial to align your brand with the right consumers and strategies.

HMT can help you navigate this dynamic landscape. With our expertise in food and health marketing, we can assist your company to develop a strong, purpose-driven brand that resonate with today's consumers.

Whether you're aiming to scale your business or create an innovative product, our team provides tailored solutions from brand strategy to design, offering deep insights to support your company's growth. Contact us or visit our website to learn how we can support your business today! - https://www.thehmt.com/contact/

Let’s Create Change Together

HMT?is the international expert agency for?innovation, marketing?and?branding?in?food, health?and sustainability, since 2007. We tell you what is happening in the market and why (trends & insights), where to play (strategy) and how to win (brand & design), to create purpose-driven change together with our clients.

Sources:

1. Innova Market Insights. Low and No Alcohol Beverage Market Trends in Europe. 2024. https://www.innovamarketinsights.com/trends/no-alcohol-beverage/
2. Simon-Kucher & Partners. From Bubbles to Budgets: What’s Driving Beverage Trends in 2024? https://www.simon-kucher.com/en/insights/popular-drinks-beverage-trends-2024