Gen Z & Alcohol: Pubs Adapt to New Habits

In the US, alcohol consumption is at its lowest level in 90 years. Generation Z is drinking less than previous generations, and the embarrassment young people feel when talking about alcohol is starting to transform where they go out, what they order and how bars are designed for them, writes Business Insider.

Younger drinkers say they feel more embarrassed than older drinkers when they have to explain why they don’t drink, according to a new study by Heineken 0.0. While a growing percentage of Americans feel comfortable turning down an alcoholic drink with a simple “no thanks” (72%) or opting for an alcohol-free alternative at parties (86%), only about half of Americans under 35 feel comfortable drinking low-alcohol or alcohol-free beverages in public.

They’re also more likely to expect someone to ask them why they don’t drink alcohol and more likely to feel like they need an excuse not to drink—a paradox, given that Gen Z drink less overall. As young adults turn down alcohol, but worry about how to justify it, nightlife operators are rebuilding their menus, spaces and social experiences around a generation that wants to go out without having to explain what’s in their glass and why.

Laura Fenton, a researcher at the University of Sheffield‘s School of Medicine and Population Health, who studies drinking behavior among young people, says the tensions around discussions about drinking probably stem from social expectations.

Even for Gen Z consumers, she explained, “drinking together can be very important for friendship and creating a sense of belonging.” A Danish study he cited found that young people feel they have to give a good reason when they don’t drink or when they refuse alcohol on dates with their friends, because “drinking is a kind of demonstration of reciprocity.” “So if you’re not going to be at the same level, you have to have a good reason,” Fenton said.

Gen Z’s approach to alcohol is also shaped by a notable anxiety about the health problems and other risks associated with alcohol consumption, as well as an aversion to high costs. With cocktails priced at $15 or more in most cities, many young adults opt for juice, coffee or mocktails, perceiving them to offer better value than alcoholic beverages. “They’re just much more aware consumers,” said Marten Lodewijks, president of beverage market data firm IWSR. “It’s not that they just don’t want to drink. They like it and enjoy it as much as other generations.

They just know it’s not good for them, so they don’t do it as often.” Operators say the shift isn’t theoretical; they’re seeing it in real time. Michelin-starred chef David Chang said in a November interview that declining alcohol consumption among Gen Z is a “real existential threat” to restaurants if they don’t adapt, given the industry’s already thin margins. Alcohol-free bars are popping up in major metropolitan areas — and one operator told Business Insider in January that every bar will need to expand its alcohol-free offerings to stay competitive.

That shift is already happening: Mocktails are now appearing on menus not as side offerings, but as full offerings that look, feel and cost like traditional cocktails, explained Stacy Molnar, chief operating officer at Ideation Design Group, which has been working on restaurant and bar concepts for more than 30 years. “Ultimately it’s about revenue per seat,” Molnar said.

“If someone wants to order a $15 mocktail instead of a $15 cocktail, that’s great — they feel included, and the operator is meeting their revenue expectations.” Anne de Graaf, director of corporate affairs for Heineken USA, says that “zebra striping,” when people choose to alternate between alcoholic and non-alcoholic beverages, is also on the rise. But it’s not just the drinks list that’s changing; but also the general experience at the bar.

Younger consumers want something to rally around when they go out, such as board games, trivia nights, themed environments, Instagrammable bathrooms, shocking attractions and distinctive decor. In other words, said Molnar, they want atmosphere.

“They don’t go to the bar just to hang out,” continued the Gen Z bar expert, father of two. “They want an activity. They want an atmosphere.” From all-pink cafes trending on TikTok to bars built around entertainment, the industry is moving away from alcohol as its main attraction. Instead, they focus on aesthetic experiences that make socializing seem minimal—and alcohol optional.

“It’s not just about the alcohol,” says Fenton, the youth drinking researcher. “It’s about what young adults want from their social life. If you think about it, for young adults, drinking is a social behavior and it’s very much about forming and maintaining social bonds.”

Bars that are successful with younger customers don’t just offer alcohol-free options; they no longer emphasize alcohol at all. They become multi-experience spaces where friends can hang out without feeling judged, pressured or out of sync with the group, Molnar said.

So what’s next? Expect to see more bars that focus less on alcohol and more on belonging—and more spaces where saying “I’m not drinking tonight” doesn’t require a speech.