When It Comes To Beer, Millennials Are Keeping It Craft and Killing The Crap
There has been yet another addition to the ever-growing list of things millennials are ruining; from marmalade to marriage, from Hooters to Harleys, but now these hog-hating, boob beleaguers have set their sights on yet another American industry: beer. This lovely chart from Business Insider shows how millennials are less likely than their parents to recommend beers like Budweiser, Bud Light, Corona or Miller Light (which has for some reason been specifically shunned by millennials) and are therefore killing the beer industry. Because, you know, there are only ten beer brands and if we don’t like Budweiser or Heineken then something must be seriously wrong with our generation.
In response to one percent fall in beer market penetration from 2016 to 2017, Goldman Sachs downgraded Boston Beer Company (Sam Adams) from “neutral” to “sell” and Constellation Brands (Corona) from “buy” to “neutral.” As for the reasoning behind this drop in penetration, Sachs pointed to the easy target: millennials. However, when providing data of to explain what it called “a shift in preferences in the younger cohorts,” the main culprit appeared to be those aged 35 to 44, who have taken a shift to wine and spirits. The data actually showed millennials (defined here as less than 35) penetration in the beer market is not increasing, but also not decreasing. But when paired with the chart earlier that showed how millennials are less likely to recommend major beer brands, Goldman Sachs tried to merge the two into an insight into the millennial community, because nobody knows millennials better than Goldman Sachs.
But what is actually happening to the drinking habits of millennials is a much bigger cultural shift than going from beer to wine and spirits. It’s not because we don’t like beer (we do) and it’s not because we like weed more than beer compared to baby boomers (we don’t). It’s because we don’t like shit beers. All of the beers mentioned in the UBS chart above are mass produced, name-brands that can be found in most any bar in America, and have been in our parent’s fridge our whole lives. We’re done sneaking Coors Lights from our dad’s 12 pack and crushing them in the woods. Now that we have finally reached 21 (a barrier our parents did not need to cross in order to drink) we can finally take the time to enjoy a beer. This notion would fit perfectly with data that shows how millennials value experiences over ownership. We don’t care about having 23 more Millers left after this one, we’d rather have the experience of a growler that costs the same price as a case of crap.
The notion that millennials are killing the beer industry couldn’t be further from the truth. A much more accurate, but far less eye-catching headline would be, “Millennials Are Killing Name-Brand Beer and Are Instead Supporting Locally Owned Breweries That Otherwise Wouldn’t Exist Without Their Patronage.” But that doesn’t roll off Jim Cramer’s tongue quite the same. A recent survey by AT&T showed that, while 59 percent of millennials have never worked in a small business, nearly 50 percent of respondents aged 16 to 34 said that they would spend extra money in order to support a small business. Compare this with 38 percent of gen x respondents and 42 percent of baby boomers and it begins to make sense why millennials are a monolith in moving away from mass produced beer and towards small-scale craft products. Now, why anybody would try to spin this support for the little guy as a bad thing is entirely beyond me, except for the fact that your local hometown brewery isn’t on the S&P 500. But, much the same way some skeptics in the immigration debate forget that their families were once immigrants, many market analysts and stockholders forget that Anheuser Busch wasn’t always the titan of the beer industry it is today. When Eberhard Anheuser bought out the Bavarian Brewery in 1860 to form E. Anheuser & Co. in St. Louis, they had no brand recognition, no public stock. They had the one thing that all of the craft breweries that millennials love have: their beer. In the case of Anheuser, he introduced the lager to America, which it had previously never known until a large influx of German immigrants came to the country in the mid-1800’s. But now the lager has become skunked, and after 160 years of lagers, the American youth has embraced innovations in inebriation. India Pale Ales (IPAs), fruit-flavored beer, wheat ales and a hell of a lot of hops are the new frontiers of the American beer industry.
From a business point of view, it would be foolish to take money out of beer companies because of this perceived passé status of beer with millennials. Have you ever been to a college campus? The young adults there aren’t funneling bottle after bottle of rosé down their gullets or sitting around enjoying an aged scotch, as many market analysts seem to believe. Beer still reigns supreme with millennials, and the breweries have nothing to fear as long as they are producing a quality product. It is the same argument with millennials and cable TV. Millennials are ditching cable in droves because we are tired of the same old shtick and have instead gone to streaming mediums that don’t just play Big Bang Theory reruns on repeat. The reason that millennials are “killing” all of these industries is that they offer us nothing new. We’ve seen our parents drinking Budweiser, riding Harleys, and watching Friends reruns long enough to demand better. And if those industries can’t adapt to the changing interests of the next generation of American consumers, that’s on them, not us.