Podcast: Two Cents' Worth

Two Cents’ Worth: Disrupting the booze

When someone forwarded me an article about millennials drinking less, I didn’t quite believe it. I’m a millennial and I haven’t noticed the pubs getting any quieter.

But when I visited Auckland’s Go Green Expo earlier this month, young people were crowding around stalls offering alcohol-free spirits. They were going crazy for these zero-alcohol options.

And I could see why. I tried the zero-alcohol gin and I was pleasantly surprised. Having tried a pretty foul alcohol-free beer a few years ago - I was put off the idea of zero-alcohol beverages - but it seems the market has really upped its game.

We’ll come back to the gin later… but for now, I’ve got to ask…  are Kiwi Millennials really drinking less? Nicki Jackson, the executive director of Alcohol Health Watch says that actually, it’s the younger end of the Millennial generation leading the charge, as well as adolescents.

So what’s behind the change? Jackson suggests a few things:

“A number of reasons include the health and wellness culture that we’re seeing among the young Millennials and being more aware of the risks around drinking," said Jackson.

"It also could be that we’ve seen significant increases in hazardous drinking in our middle aged and older adults in New Zealand, and it might just be that young adults and adolescents are turning away from what their parents are doing."

“The mentality now is that you can go to a club…with friends and still feel part of the group and have a Heineken – that’s got no alcohol in, and be part of the party and not feel as though you’re missing out on anything."

In other words, it’s teenage rebellion in the form of sobriety.

That sort of change in culture and behaviour has got to have some sort of impact on New Zealand’s alcohol and hospitality industries.

But is New Zealand ready for the change?

Back in 2015 Grady Elliot opened New Zealand’s very first dry bar on K road. But after a five week trial, he decided to cut his losses and apply for a liquor license. He’s still unsure whether New Zealand is ready for another dry bar but says the improved quality of alcohol-free beverages on offer these days is beginning to change the drinking culture.

“The mentality now is that you can go to a club…with friends and still feel part of the group and have a Heineken – that’s got no alcohol in, and be part of the party and not feel as though you’re missing out on anything,” he said.

And the opening of New Zealand’s first ever Kombucha tap room, New Leaf, is perhaps proof that times are changing. The bar only serves fermented tea (which is very low in alcohol) and caters to a weekend crowd looking for a good time without the hang over.

Derek Hillen Head Brewer and owner of the bar says many of his customers do not drink alcohol and they tell him they have nowhere to go.

"Just because you don't drink booze doesn't mean you want to sit home Friday nights and sip warm water," he said.

"Our taproom is a place people can socialize and relax without dealing with the unappetising consequences of consuming alcohol or the unappetising consequences of dealing with drunks."

"This is why we are open late, until 10pm, Friday and Saturday nights,” said Hillen.

Having been open for four months now, it would seem that the appetite for booze-free socialising has increased since 2015.

And alcohol-alternatives are popping up all over the place. Will and Diana Miller run the zero-alcohol gin company, Ecology and Co, based in Devonport, Auckland. It’s their gin I sampled at the Green Expo, and I’m not the only one who thinks it’s good... business is booming and they’re already beginning to think about scaling up to export around the world.

"Just because you don't drink booze doesn't mean you want to sit home Friday nights and sip warm water."

I asked Diana about whether she sees Ecology and Co disrupting the business of booze.

“Yeah, I certainly hope that our product might help lead the way in terms of being a great replacement for a beautiful, sophisticated, adult drink, rather than having to grab something off the kiddie menu when you’re out," she said.

"The alcohol industry is definitely being disrupted massively by the fact that young people in particular and certainly a lot of older women in particular are deciding not to drink as much, or to drink at all, and that is changing the drinks industry around the world and I feel that we’re going to be a big part of that as well,” said Diana Miller.

The Millers see themselves very much as a challenger business - challenging people’s drinking habits, challenging the idea that a drink has to be alcoholic to be sophisticated, and challenging bars to cater to those who aren’t drinking so much but still want to go out and socialise.

But Nicki Jackson says while zero alcohol drinks are part of the solution to our drinking culture, but they’re not a silver bullet.

“What we’re seeing in New Zealand is that people are not substituting, they’re not choosing to say ‘well I’m not going to drink this high strength beer and I’m going to choose a low alcohol beer,’ everything’s going up, people are adding it to their basket, adding it to their weekly consumption,” she said.

Jackson says true disruption to New Zealand’s dangerous drinking culture will only come from financial deterrents… higher tax on drinks with higher alcohol content, and restrictions on availability and advertising.

So it may be some time before Grady Elliot braves another dry bar in Auckland.

But the culture around drink does seem to be changing and it’s inspiring a whole new industry in alcohol alternatives.

Cheers to that.

About Two Cents' Worth

Two Cents' Worth has been launched by Newsroom in a co-production with RNZ. It is the country's first weekly business podcast and will be broadcast just after the midday news on Sundays on RNZ National, will be available on both RNZ and Newsroom's websites and can also be found on iTunes and other podcast apps.

Each week we will examine one issue in depth and then convene a panel discussion. Here is this week's version on RNZ as well. 

Two Cents' Worth - the business week and the business outlook. Previous episodes are below.

Episode 1: Sunday November 4: The rise of double cab utes, the TAB's big profit and a threat to small electricity retailers.

Episode 2: Sunday November 11: Why your first job is crucial, why interest rates are so low and why wholesale power prices are so high

Episode 3: Sunday November 18: Inside a zombie town as its mill faces a closure decision, how a New Zealand company won big in Singles day and the future of Vector after the departure of chairman Michael Stiassny.

Episode 4: Sunday November 26: The rule of 8s and Trade Me’s big buyer

Episode 5: Sunday December 2: Why we don't buy cheap petrol

Episode 6: Sunday December 9:  Inside open banking

Episode 7: Sunday December 16: A ride sharing revolution

Episode 8: Friday January 25:  Salmon set to surpass dairy, save the planet

Episode 9: Friday, February 1: The wedding economy: a love story  

Episode 10: Friday, February 8: Our place in the space race

Episode 11: Friday, February 15: How NZ changed world economies  

Episode 12: Friday, February 23: The Park Mews effect 

Episode 13: Friday, March 1: Refashioning NZ's rag trade 

Episode 14: Friday, March 8: Recycling plastic won't save the world 

Episode 15: Friday, March 15: The secret battle of the CPTPP

Episode 16: Friday, March 22: Raw power in the internet era 

Episode 17: Friday, April 5: Hundreds more Bryans 

Episode 18: Growing a cannabis economy 

Episode 19: Friday, April 18: Opening the books 

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