Flavored Alcoholic Beverages for the 2020s

Who’s drinking what? That is the question, and its answer is a snapshot in time - always changing.

In the past few years, there have been interesting shifts in U.S. consumer preferences for alcoholic beverages. These shifts are distinctly generational and influenced by other factors such as health and wellness issues, a flood of new microbreweries/distilleries, and the legalization of cannabis.

This blog will examine trends in alcoholic beverage consumption by generation to help identify what types of new beverages and flavors may have the best chance of success in the early 2020s. It ends with flavor recommendations for spirits, cocktails, coolers, spritzers, beer, hard ciders and hard seltzers. For more personalized, in-depth information on flavor ideas, please email tgooding@abelei.com to start the conversation.

Alcohol Consumption at a Glance

Generally speaking, overall sales of alcoholic beverages have been flat in recent years. However, the market share of these subcategories: beer, wine, spirits, cocktails, hard ciders, hard seltzers has changed significantly. Overall beer sales have been slowly declining, though the more specialty microbrews and beers with higher alcohol contents (ie. IPAs in the 5%+ ABV range) have seen significant growth. Sales of wine have been flat, but those of sparkling and rosé wines are growing very nicely. Interestingly sales of higher ABV (alcohol by volume) spirits and cocktails are generally on the increase and are starting to rival wine sales while relatively new segments - hard ciders and especially hard seltzers - are spiking.

Notable Differences in Generational Consumption

Generation Z, defined as the youngest of the legal drinkers, includes approximately 90 Million Americans born between 1997 and 2015 (ages 5 – 23 years in 2020). This generation is drinking significantly less alcohol than older generations did at their age. Reasons for this are thought to include anti-drug and drinking campaigns during their school years, the growing legalization and use of THC containing products, and a general preference for appearing “in control” should someone post a picture or video of them on social media. When they do drink, Gen Z’s prefer lower alcoholic, lower caloric and lighter tasting drinks like hard seltzers, wine coolers, hard ciders and lighter beers.

Generation Y or Millennials are defined as the approximately 72 Million Americans born between 1981 and 1996 (ages 24 – 39 years old in 2020). Though Millennials drink significantly more alcohol per capita than Gen Z’s, they too consume significantly less alcohol than older generations did at their age for similar reasons. More so than other Generational groups, what Gen Y’s drink varies sharply between women and men. While men and women of this generation drink more beer than other generational groups, Gen Y women prefer wines (medium-to-heavier bodied whites and reds like Pinot Grigio, Chardonnay, Red Blends, Pinot Noir and Cabernet Sauvignon), flavored cocktails (Margaritas, Cosmopolitans, Pina Coladas), hard ciders and hard seltzers, whereas their male peers prefer IPA’s and higher ABV beers and spirits: mainly Whiskey, Vodka and Rum, straight or in cocktails. Millennial men and women combined account for the clear majority of hard seltzer sales, due mainly to their general concern for few calories and carbohydrates. This generation also consumes more alcohol in bars, clubs, restaurants and entertainment venues than the other generations.

Generation X is defined as the approximately 65 Million Americans born between 1966 and 1980 (ages 40 – 54 years old in 2020). According to Beverage Daily, experts believe this to be the best generation to target for sales of alcoholic beverages, as they have the most diverse interest, consumption per capita and the purchasing power second only to Baby Boomers. As for what they drink, Gen Xers drink 13% more wine than any other generation. They like similar wine varietals as Gen Y’s with the addition of more complex varietals like Zinfandel and they are willing to pay more per bottle than Gen Y’s. Their consumption of spirits and cocktails has been showing a steady upward trend for years. And, while they are more traditional beer drinkers (lagers, stouts and light beers), their consumption of beer has slowly declined over time. Like Millennials, they too fancy the craft beer and small-batch spirits trend.

The Baby Boomer Generation is defined as the approximately 72 Million Americans born between 1944 and 1965 (ages 55 – 71 years old in 2020). Though for health and wellness reasons one might expect Boomers’ volume consumption of alcohol to be declining, the opposite is true. In fact, in the past decade, drinking rates for U.S. Boomers have nearly tripled, and they account for 45% of the nation’s alcohol consumption. Add to that their purchasing power and you have the most attractive group of alcohol consumers for premium brands. Boomers don’t drink nearly as much beer as they once did, and when they do it is normally lagers and lighter beers. Their diverse and upscale wine interests reflect their love of travel and worldly things, and their steadily growing interest in spirits and cocktails is strong though traditional with Whiskey (mostly Bourbon) and related cocktails (Old Fashioned, Manhattan, Whiskey Sours) being particularly popular. Also of note is that Boomer women are increasingly trading off their preference for wine for spirits and cocktails.

Flavors for Alcoholic Beverage

For over 30 years abelei flavors has been successfully flavoring alcoholic beverages of all kinds. Presently, we have over 400 flavor formulas on file that are already TTB-approved for use in alcohol-containing beverages. That list covers more than 50 flavor types listed in this link with, in some cases, dozens of formula profiles of Apple, Cherry, Lime, Watermelon, Cucumber, Strawberry and others. This list is an excellent brainstorming tool for flavor ideas suitable for new products in all the major and growing alcoholic beverage categories: spirits, cocktails, coolers, spritzers, beer, hard ciders and hard seltzers.

Additionally, abelei believes that flavors likely to be used in future alcoholic beverage products will be creative blends of the basics (lemon, cherry, etc.) accented by compatible sweet, spice or floral notes. For ideas along these lines please click here for a recent blog on flavor pairings. Of course, if you would like more information or free flavor samples to jump-start your NPD projects please either call me, Troy Gooding @ 847-924-5855, email tgooding@abelei.com or click here to complete and submit your online request for flavor samples.

Flavorful regards!