The rise of ready-to-drink (RTD) beverages and the shift in consumption habits of Generation Z are redefining the market. Despite consuming 20% less alcohol than other generations, Generation Z is connecting better with this innovative format. So, the question is not “does Gen-Z like to drink?”, but rather “What, how and when do they prefer it?”
The dynamics of the beverage industry in Latin America and Spain are undergoing a transformation driven by younger generations, one that has challenged norms and is setting new trends in how they consume and relate to various products, including alcoholic beverages. That’s the reason behind one of our latest industry reports, where we decided to analyse and understand what was the biggest opportunity for the alcoholic industry in the near future, among the “youngsters”. Our study ultimately reveals how changes in consumption patterns and emerging trends are shaping a constantly changing market.
From a decline in interest in alcohol consumption to a greater search for convenience and authentic, healthy, and exotic flavours, the consumption habits of Generation Z are redefining how companies approach product development and marketing in Latin America and Spain. This opens up significant opportunities for companies not only dedicated to alcohol but also to beverages in general, and anyone looking to position themselves within the interests of Generation Z (events, food, entertainment, sports, and the list goes on and on).
Gen-Z drinks, they just do it differently
One of the report’s highlights is the change in Generation Z’s consumption patterns. Unlike previous generations, this generation tends to consume less alcohol. This decrease is linked to increased awareness of health and physical and mental well-being, as well as the pursuit of unique, close, and authentic social experiences that traditional alcohol consumption fails to provide. Therefore, they have chosen to prioritise other areas of their lives over alcohol.
The COVID-19 pandemic has also played a significant role in this transformation. While the alcoholic beverage industry is concerned about how to approach Generation Z, the closure of bars and entertainment venues led to an increase in the demand for ready-to-drink (RTD) beverages. This indicates that, although 44% of Generation Z has lower alcohol consumption than baby boomers or Generation X, there are ways to capture their attention, and RTDs emerged as one of those ways. According to the study, this preference has persisted even after the pandemic, with a 35% increase between 2020 and 2023 within the demographic. There is a strong focus on more intimate and meaningful experiences rather than the simple pursuit of the euphoria of consumption. Additionally, the preferred “time and place” for Gen Z to drink has expanded beyond bars or parties to include more intimate and homely settings.
The Rise of RTD Beverages
In this context, ready-to-drink (RTD) beverages have experienced impressive growth in Latin America and Spain. The annual growth rate of the RTD industry is notable, surpassing 10% year after year, while beer and wine struggle to reach even a 2% growth. Several factors drive the changing preferences of modern consumers, with convenience and experience being key drivers. Generation Z seeks options that fit their busy lifestyles and allow them to enjoy high-quality beverages anytime, anywhere, including mixes of exotic flavors that reflect their cultures. RTDs meet this need by offering pre-mixed beverages ready to be consumed without additional preparation.
In addition to convenience, RTDs also allow Generation Z to connect with other interests, as some brands include new features such as low calories, low sugars, artificial flavor-free, gluten-free, and/or a greater commitment to the environment through natural ingredients, eco-friendly packaging, and sustainable production.
Key Considerations and the Future of RTD Beverages
The report highlights that Generation Z’s consumption decisions are influenced by personal concerns, such as their image on social media, influence on their personal or professional quality of life, and concerns about physical and mental health. They associate alcohol with vulnerability and anxiety, influencing their preference for RTDs, which offer a more moderate and controlled form of consumption. Even though they may cost more than traditional and simpler production options, Generation Z is advancing in their careers and is willing to spend more if they feel better about the product.
The future of the RTD beverage industry in Latin America and Spain depends on brands’ ability to adapt to and anticipate emerging trends among Generation Z. Those that can balance convenience with authenticity, offer options for those practising flexible sobriety (“sober curious”), and create marketing campaigns that resonate with the values of this generation will be in an advantageous position to capture the attention and loyalty of this growing demographic; to achieve this, it’s key to understand the reasons behind their behaviour:
- Convenience: Generation Z values convenience above all else. Canned drinks are portable, easy to store and require no additional preparation. This fits perfectly with their active, on-the-go lifestyles.
- Fast-paced lifestyle: “Zetas” often have busy schedules that combine work and social life. Canned beverages are a quick and affordable solution when they don’t have time to prepare a sit-down drink at a bar or café.
- Variety of flavours and options: The RTD beverage industry has experienced a boom in innovation and product diversity. Consumers can now choose from a wide range of flavours and options. This caters to the diverse and changing tastes of Generation Z.
- Health and wellness: Some brands have responded to this demand by offering RTD drinks that are low in sugar, non-alcoholic and contain natural ingredients. This allows them to enjoy tasty drinks without compromising their health.
- Sustainability: This generation is more environmentally conscious and tends to prefer recyclable packaging. Many beverage cans are recyclable, which aligns with their environmental values.
This preference, according to the study, has continued even after the pandemic, rising 35% between 2020 and 2023 within the demographic, and with a strong focus on more intimate and meaningful experiences rather than the simple pursuit of drinking euphoria; also, a point to note is the shift in Gen-Z’s preferred “time and place” for drinking: no longer limited to bars or parties, but looking for options that fit into more intimate, homey spaces.
This report by Samy Alliance not only highlights the evolution of the RTD beverage industry in Latin America and Spain but also explores how companies can leverage this period of change to explore new territories with Generation Z. From a decline in alcohol consumption to a greater search for convenience and unique flavours, these trends are redefining how companies approach the development and marketing of new products, analysing how some brands are already seizing the moment to understand and position themselves early in the minds of consumers.
The path to success for brands in this industry lies in understanding and adapting to the unique needs of Generation Z, offering products that fit their lifestyles, values, and interests. The study provides an individualised analysis of the markets with the highest growth projections, examining preferences for flavours, consumption times, communication types, and additional features that are making some brands stand out, along with a comparison with the U.S. market, the current leader in RTD offerings, to project possible paths in these territories