Amongst all the unexpected weirdness we’ve witnessed in 2022, one of the more jarring moments was hearing the news that the Japanese government was trying to encourage young people to drink more alcohol
Amongst all the unexpected weirdness we’ve witnessed in 2022, one of the more jarring moments was hearing the news that the Japanese government was trying to encourage young people to drink more alcohol! That’s right, Japan’s millennials and Gen Z aren’t drinking enough sake. So, in August 2022, Japan’s national tax agency launched a nationwide competition—Sake Viva! —for ideas that encourage people in their 20s and 30s to consume more sake and help boost the economy.
That was strange because, well, one expects governments to caution people against drinking alcohol. However, it has emerged that younger generations in Japan drink less alcohol than their parents, and that has affected revenues. But it was not a bolt out of the blue. Nor is this phenomenon limited to Japan.
Millennials and Gen Z have, for years now, consumed less alcohol than Gen X or boomers. They also do not drink the same kinds of alcohol. They dislike big-brand beers like Budweiser or Heineken, and many of them also seem to prefer—brace yourselves—non-alcoholic beverages. What?
The trend had been gathering momentum for nearly a decade. Reports about millennials being unimpressed with beer and drinking in general began emerging after 2013. It indicated a cultural shift—alcohol was no longer as attractive to millennials and Gen Z. As one person put it to a CBS reporter, "I was sick of drinking because it made me sick." Another 24-year-old told The Atlantic in 2019: "Drinking seems expensive to me." The attitude towards alcohol was shifting among young people: drinking wasn’t central to having a good time anymore, and, for many youngsters, the payoff wasn’t worth the cost anyway. There is another factor that alters the cultural landscape for millennials and Gen Z and sets them apart from previous generations: social media. No one wants a photo or video of their drunken antics to be shared on social media. This is a big no-no for millennials and "zoomers" and is viewed as a serious loss of social capital or status. With the ubiquity of mobile devices and cameras, no millennial or zoomer wants to take a chance. Hence, limit the drinking. But that’s not the only reason.
You’ve probably come across the phrase "sober curious." It means the person is choosing to avoid alcohol for personal or wellness reasons and wants to try a sober lifestyle. Maybe they’re just sick of too many hangovers? What’s clear is that millennials and Gen Z have a different philosophy towards alcohol. They do not drink to get drunk, and they have very different considerations compared to previous generations. They prefer local brands, they support local products that are deemed more authentic and conscientious, and they make choices that support healthier lifestyles. The drumming in of public messages that cigarettes and alcohol are bad for health over the last few decades seems to have been a striking success! Several news reports have indicated in recent years that health concerns are a major factor in the decreased consumption of alcohol by people in their 20s and 30s today.
There was also a change in attitudes toward different types of alcohol. Beer sales have been dropping for a while now. AB InBev (Anheuser-Busch InBev), the world’s largest beer maker and owner of 500 beer brands (like Budweiser, Corona, etc.) in 100 countries, has a massive 38% share in the $250 billion global beer market. Earlier this year, the company’s CEO, Michel Doukeris, went on business news channels in the US to spell out the formula AB InBev had devised to keep pace with the changing times. One sentence he spoke was very revealing: "Our portfolio continues to evolve... consumers’ preferences, they evolve... and we are leading innovation across most of our markets." That was the CEO of the largest beer maker in the world admitting to investors, shareholders, and the wider world that tastes were changing in multiple markets and that his company was already planning for the change.
Walking away from beer is not a new thing. Research shows that beer consumption has dropped over 30% in the United States since 1980. In fact, trends indicate that beer consumption has gone down in traditional beer markets and is increasing in emerging markets. Per capita beer consumption grew in the west following World War II and peaked in the 1970s. By the 1980s, beer consumption had begun decreasing gradually. The US was an exception I(for a while) because of immigrants assimilating into broader American culture via socializing, but most traditional beer markets like Belgium, Germany, etc. were moving on from beer. For a brief spell, traditional wine-drinking countries like Argentina, Spain, and Italy started having more beer. As economies grew, so did new markets for beer. Take China, for instance – from near-zero beer consumption in the 1980s, China became the largest beer market in the world in 2003. In India, alcohol consumption grew by 37% in the last 10 years.
Then there’s the cycle of trends. Studies show that as people become more prosperous, their tastes in alcohol change. So, as people in traditional beer markets became more affluent, they began venturing beyond beer to wine, whiskey, spirits, and other modern innovations. At the same time, globalization has reduced the prices of exotic or foreign alcohol in many markets, like wine. So, you now have people in Ireland and Germany sipping more wine while the young people in France, Italy, and Russia are downing more pints of beer. By 2017, the share of beer in annual alcohol consumption in the UK and Ireland had fallen to under 50%. In the 10 years from 2011 to 2021, AB InBev and Molson Coors, the two biggest brewers in the industry, saw their US market share drop by a whopping 17%.
Industry experts say that the overall decrease in beer consumption, in combination with the craft beer revolution and inflation, has led to the biggest manufacturers rethinking their entire strategies for the future.