Europeans ditching alcohol for taste and health reasons, research firm says

Younger Europeans are drinking less alcohol because of the way it tastes and concern over their health, a market research firm said on Oct 7, suggesting slow sales are a result of changing preferences rather than just a financial squeeze.

Alcohol sales have been falling in developed countries in recent years, prompting debate over what has driven the declines.

Some executives argue it is mostly a result of cyclical financial pressure on consumers, which means sales should bounce back when times get better. But others say the shift is a sign of changing preferences, which could be harder to reverse.

Circana, a US market research company, said its survey pointed to a generational shift in Europe, where it found 71 per cent of consumers were buying or consuming less alcohol, and almost one in four 25-35-year-olds had ditched alcoholic drinks altogether.

The shift demanded “strategic reinvention” from beverage companies, said Mr Ananda Roy, senior vice-president of thought leadership at Circana.

Its survey found that 55 per cent of Europeans said non-alcoholic drinks were “more refreshing”, while another 27 per cent said they were healthier or tasted better.

Non-alcoholic drinks now account for nearly 60 per cent of sales in Europe’s €166 billion (S$250.4 billion) beverage market after growing 5.1 per cent year on year, while alcoholic beverages fell 1.8 per cent.

Some alcohol companies argue financial pressures are the bigger factor after years of inflation and high interest rates.

“When people say it’s all about health and wellness... I don’t buy into that,” alcoholic beverage company Diageo’s interim chief executive Nik Jhangiani told a conference in September, saying declines were more related to the economic cycle.

In August, the number of Americans who reported drinking alcohol hit a record low, according to a Gallup poll, with the majority for the first time saying even moderate drinking was harmful to health. REUTERS