Gen Z – those born between 1997 and 2012 – has been labelled the “generation that doesn’t drink”. Yet in July this year International Wine & Spirits Research (IWSR) released a report suggesting that Gen Z’s drinking habits are now largely falling in line with the broader population. What transpired were news headlines such as “Gen Z is drinking as much as older generations”, which misses the point at both ends.

“The idea that Gen Z is not drinking at all is wrong,” says Richard Halstead, chief operating officer consumer insights & custom analytics at IWSR. “The idea that Gen Z is drinking in a very different way than the same age group 20 years ago is true. But the fact that participation rates in alcohol consumption for Gen Z are normalising to a close level with the wider population does not mean that Gen Z are suddenly drinking loads. I think there is slightly more nuance to the moderation trend.”

The IWSR report covered 15 key markets including Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, South Africa, Spain, Taiwan, the UK and US. This sample provides a range of geography and economic development to give a comprehensive representation of the global market. But before analysing how people are moderating, it’s important to understand why.

Halstead adds: “If you correlate the rise in iPhone sales with reduction in or abstinence from alcohol, the two correlate inversely. Because of the influence of social media, there’s more social shame for being seen drunk or out of control.

“I think demonstrating your self control is one of the biggest social currencies at the moment. Whether it’s in terms of your looks or in terms of your behaviour or in terms of the goals you're setting.”

This movement isn’t restricted to Gen Z. Health is a trend which spans generations and is one of the major factors driving moderation globally. The other, which is more specific to Gen Z, is economic. The Covid-19 pandemic brought on a subsequent cost of living crisis globally at a time when the majority of Gen Z became of legal drinking age. “Generally speaking they'll either be living at home with their parents or if they have their own place then space may be an issue,” says Halstead. “This means they’re more likely to meet and socialise out of the house and have a drink. 

“This is the case for the developed markets, like the US, UK, France and then if you go to the developing markets, like Brazil, India and China, almost all socialising happens out of the house – in fact, the idea of hosting people at home is rare because space is limited in a big city.”

Another consequence of the pandemic is a rise in inflation, causing the prices in bars and restaurants to soar. If you combine this economic symptom with Gen Z consumers, many of whom have been in full-time education, the rise in moderation was inevitable.