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

By Emma Rumney

Oct 7 - Younger Europeans are drinking less alcohol because of the way it tastes and concern over their health, a market research firm said on Tuesday, 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 U.S. market research company, said its survey pointed to a generational shift in Europe, where it found 71% 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 Ananda Roy, senior vice president of thought leadership at Circana.

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

Non-alcoholic drinks now account for nearly 60% of sales in Europe's 166 billion euro beverage market after growing 5.1% year-on-year, while alcoholic beverages fell 1.8%.

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," Diageo's DGE.L interim CEO 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.