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The alcohol industry is undergoing a seismic shift, driven by the evolving tastes, values and purchasing habits of Gen Z and millennials. Unlike previous generations, these consumers are more health-conscious, socially aware, and, most importantly, digitally savvy. Zac Brandenberg, co-founder and CEO at Drinks, explains how traditional brands can adapt and how start-ups are thriving by catering to this new wave of digitally sophisticated drinkers.
The 1962 animated series The Jetsons imagined a futuristic 2062, where everyday tasks were simplified through automation – from food preparation to shopping to household chores. We’re more than halfway to that future now, and while we haven't quite achieved their flying cars, we've surpassed the Jetsons’ vision in many ways. Today's consumers can order virtually anything with a few taps on their phones, get groceries delivered within hours and receive personalised recommendations through AI. Yet, while consumers can order almost anything with a few taps on their phones, alcohol retail remains firmly rooted in brick-and-mortar stores.
This disconnect between modern convenience and traditional alcohol retail is particularly stark for younger generations who have grown up in an on-demand world. Nearly half (48%) of Gen Z and millennial consumers say they would prefer to purchase alcohol from their favourite online retailers – more than double the rate of consumers aged 45 and older (23%), according to Drinks’ survey. This preference is no slight shift; it's a fundamental reimagining of how the alcohol industry should work in our digital age.
This transformation represents the biggest challenge yet to the traditional alcohol distribution model. As millions of Gen Z consumers reach legal drinking age and millennials enter their prime purchasing years, manufacturers and distributors must urgently adapt their operations to meet the demands of these digital-first consumers. If they don’t, they’ll miss out on more than flying cars – they’ll lose these customers to more innovative competitors.
The new rules of alcohol retail
Today's younger consumers expect the same digital convenience in alcohol retail that they experience everywhere else. While older generations remain committed to in-store shopping, Drinks' data shows millennials and Gen Z are pioneering a hybrid approach that blends digital and physical experiences.
This shift isn't about abandoning traditional retail – quite the opposite. Recent Shopify data reveals that 47% of Gen Z consumers value in-store discovery, using physical spaces to explore new products. However, they expect these traditional experiences to be enhanced with digital conveniences, like mobile ordering and same-day delivery.
Beyond shopping preferences, Gen Z is reshaping brand expectations. While they currently represent just 6% of alcohol buyers, Gen Z and Millennials make up 62% of the global population, with millions entering the BevAlc space over the next decade.
Their influence is already apparent: Despite 21.5% of Gen Z not drinking any alcohol, 47.5% of those who do drink demand ingredient and calorie transparency from brands, and over half will stop purchasing from companies whose values don't align with theirs. This combination of demographic growth and consumer demands has pushed major alcohol brands to expand beyond traditional offerings, with companies launching alcohol-free alternatives, digital-first purchasing options, and more transparent product labelling.
For manufacturers and retailers, Gen Z’s growing market influence means:
Digital integration must provide the transparency Gen Z demands, from ingredient lists to company values.
Manufacturers need to redesign their distribution networks to support seamless digital ordering and delivery.
Companies that invest in both digital infrastructure and transparent practices now will capture the next generation of consumers.
Overcoming the eCommerce trust gap
The path to digital transformation isn't without obstacles. While younger consumers want digital convenience, Drinks' research reveals their key concerns: high delivery fees, shipping damage risks and a lingering attachment to in-store shopping experiences.
These challenges stem from an outdated infrastructure designed for bulk retail delivery, not individual shipments. However, the blueprint for a solution already exists in the grocery sector, where micro-fulfilment centres near population hubs have revolutionised last-mile delivery economics.
For alcohol manufacturers and distributors, adaptation means rethinking everything from packaging design to distribution networks. Success requires building infrastructure that can seamlessly serve direct-to-consumer (DTC) alcohol delivery – delivering the convenient future that seemed like science fiction just a few years ago.
Building for tomorrow’s alcohol consumer
Gen Z’s behaviour offers a preview of tomorrow's marketplace. Unlike previous generations, who relied on in-store browsing and traditional recommendations, these digital natives turn to social platforms to evaluate everything from shipping speed to customer reviews.
This mindset is reshaping product discovery. Drinks reports that younger consumers are three times more likely to be influenced by online recommendations and targeted advertising than older demographics. Yet the fundamentals haven't changed. Personal recommendations still drive product trials, but these conversations now happen primarily through digital channels.
This shift means digital discovery is becoming as crucial as physical shelf presence. The challenge has evolved from selling online to creating digital experiences that match the convenience and social validation these consumers expect in every other category.
The road ahead: Strategies and trends for 2025
The alcohol industry is at an inflection point as younger consumers reshape purchasing patterns. To succeed in this evolving marketplace, businesses must focus on the following key strategies while preparing for emerging trends:
Digital integration: Build seamless ecommerce capabilities that connect with existing retail systems, allowing consumers to purchase through their preferred channels while maintaining compliance.
Catalogue optimisation: Leverage AI and data analytics to curate product selections that match consumer preferences and personalise digital shopping experiences.
First-party relationships: Develop direct connections with consumers to gather valuable insights, inform product innovation and enhance marketing strategies.
Supply chain modernisation: Adapt distribution networks to prioritise speed and flexibility in both retail and DTC delivery.
As businesses implement these strategies, larger industry shifts are already taking shape. Digital integration has become a business imperative. Drinks' data shows that retailers adding alcohol to their ecommerce platforms see 2-5% gross merchandise value (GMV) growth. To capture this ecommerce opportunity, manufacturers and distributors must develop new fulfilment capabilities that can handle individual consumer orders alongside traditional retail distribution.
The three-tier alcohol distribution system, established after prohibition to regulate the flow of alcohol from producers to consumers through distributors and retailers, is evolving to include what we call the 'Fourth Tier'. This digital layer enables established online merchants to seamlessly add alcohol to their offerings without navigating the complex and expensive conventional alcohol licensing path. Through AI-driven product recommendations and streamlined compliance, the Fourth Tier creates opportunities for brands to reach consumers through diverse digital channels – from lifestyle content creators to established ecommerce platforms – while maintaining all legal requirements.
This evolution comes at a critical time, as adjacent categories, like cannabis already offer the kind of superior digital experiences that younger consumers expect. The alcohol industry can no longer afford to protect outdated distribution models.
While the Jetsons' flying cars remain science fiction, their vision of seamless digital convenience is now a consumer expectation. The alcohol industry must deliver this automated, accessible future or risk losing the next generation of customers entirely.