Bars, restaurants and alcohol companies get ready; the iGens are coming. Born between 1995 and 2007 (aged 23-11), most are not yet drinking on-premise; however, research suggests iGens could reshape the on-premise alcohol market.
67% of iGens say they avoid unhealthy activities such as excessive drinking and smoking.
Pragmatic and in control
Marketers can’t think of iGens as “Millennials, but younger.” While the two groups share some similarities, they were shaped by different life events. A majority of Millennials were children during the booming economy in the 90s. Most iGens grew up during the Great Recession; their childhood/teenage years were shaped by the threat of terrorism, mass shootings and political unrest. As a result, most researchers agree iGens tend to be much more pragmatic and responsible than other generations. While iGens tend to have liberal views on social issues (especially when it comes to gender and diversity issues), they may conduct themselves in a more conservative manner. For example, 67% of iGens say they avoid unhealthy activities such as excessive drinking and smoking compared to 56% of Millennials, according to Mintel’s US research on natural consumers.
Consumers are staying in instead of going out
This pragmatic, reserved and frugal generation will likely be very different on-premise consumers than Millennials. iGens may simply be less engaged with alcohol than other generations. According to the Centers for Disease Control and Prevention, teen drinking has fallen dramatically over the years, and is much lower than when Millennials were teens. In fact, one in five consumers aged 22-24 have not had any alcoholic beverage in the past three months compared to 13% of consumers aged 25-34.
Younger consumers are choosing to drink at home, with 56% of Younger Millennials (aged 24-31 and the closest comparison to iGens) preferring to drink at home instead of go out, according to Mintel’s report on on-premise alcohol in the US. Drinking at home is a more controlled personal experience for younger consumers and 28% say they prefer drinking at home because it takes too much effort to go out. In the age of bingeable TV and delivered food, iGens don’t need to go to bars to have a good time.
Of course, while generational cohorts often share unique characteristics, generalizations don’t apply to all iGens. Not all iGens are going to be teetotalling homebodies. However, from a pure numbers perspective, the iGeneration is a relatively small generation. The US population is getting older and according to US Census Bureau estimates, over 40% of alcohol drinkers will be 55 and older by 2023. This is an issue for alcohol brands and bars as, generally speaking, on-premise alcohol consumption decreases with age. Bars that cater to younger audiences may experience a slight drop in traffic over time, as there just aren’t as many young drinkers than in past years.
What we think
Alcohol brands must adapt to changing US demographics. The overall population is aging and the next generation of young drinkers will likely drink less in general and may prefer drinking at home over bars and restaurants. Many brands are already looking for ways to engage with consumers at home. For example, Amazon, in partnership with Diageo, recently launched the new “Happy Hour” skill on Alexa-enabled devices. The skill provides drink recommendations based off of personal preferences, provides celebratory reasons for a drink, and offers bar recommendations.
Bars and restaurants need to focus on providing unique experiences for younger consumers when they do go out for a drink. Pop-up bars, unique looking or interactive drinks and unique decor can all provide an experience younger consumers want to share on social media.
