Generation Y

. . . it’s time to make some room at the bar. There’s a new
generation of drinkers coming and they are thirsty. Young,
hip and very tech savvy, they are known as Generation Y and
they are causing quite a stir on the scene.

So
just who is this formidable generation that you may not have
even heard of? Born between 1979 and 1994, they are a group
of 60 million strong (triple that of Generation X), one
third of which are currently legal to drink. A very
confident and skeptical group of people, they have been
raised in a world of emails and cell phones, the internet
and cable television. Most of them grew up with credit cards
as a way of life, and virtually all of them have had
long-term experience buying merchandise. They are very brand
conscious and they like to drink.

a LITTLE
RESPECT Traditionally,
the drinking group under the age of 25 hasn’t been given
much in the way of respect when it comes to being
knowledgeable wine and spirits consumers. Lack of money
combined with lack of experience has given young drinkers
the reputation of being novices more intent on quantity than
quality. Yet as more and more of this generation become
legal, they are proving that they represent a formidable
buying force that knows what it wants and is willing to
spend on premium products. But discovering what makes them
take to one particular trend versus another has been a
challenge to advertisers and brands alike. They are just as
comfortable sipping Grey Goose martinis at a chic bar as
they are drinking a can of Pabst Blue Ribbon at a pub. But
one thing is certain: image is everything!

BRANDING
from BIRTH
Regardless of the ethnic and financial makeup of this
generation, they share one thing in common: widespread
exposure to branding. Media outlets are everywhere from
cable TV to magazines, with the internet playing a
particularly significant role in promoting brand visibility.
This is a group of people who have always known the internet
and routinely use it to get information. These are shoppers
who want to be entertained while surfing – to be considered
a player in today’s market, an interactive website with
alluring graphics is a must. Visit any brand’s site and
there will be drink recipes, product history, contests,
retail items for sale, and usually music playing. As a
result, this group has a pre-existing level of name brand
familiarity and confidence to go with it.

a BANG
for the BUCK Alex
Steppacher, the Massachusetts On-Premise Brand Manager for
Future Brands which represents Absolut, DeKuyper and Jim
Beam says, “This group is extremely brand conscious about
everything they buy from handbags to alcohol. They shop
according to trends.” And one of the big trends of today is
buying high-end brand names. It’s a Coach and Jimmy Choo
world out there.

Huntington Wine and
Spirits, near Northeastern University, caters to a large
client base of 25 and under. As owner Steve Rubin puts it:
“Generation Y wants a bang for their buck but they aren’t
afraid to spend money as long as they are assured of getting
quality.” For instance, they are interested in purchasing
brand name vodkas but they will still shop comparatively. In
Steve’s store, (and in most of the US) Smirnoff is the
leading vodka seller as it retails for about $10 less than
Absolut and Stoli. But what this group buys in retail stores
is, for the most part, dictated by what they’ve had at bars
and what is perceived to be trendy.

the BAR
SCENE So what is
Generation Y drinking at bars and clubs? According to Angie
Silva, the bar manager for O’Neill’s Pub and Restaurant, a
popular nightclub in Salem, they are drinking “Anything and
everything!”. This includes flavored martinis, light beers,
shots, and margaritas. She adds, “This group is much more
knowledgeable about brand names and cocktails than drinkers
of ten years ago.” Still, there are some standard old
favorites that continue to do well. At The Place in Downtown
Boston, bar manager Heather Dalton finds that while both
flavored and plain martinis are big, their Stoli Doli fruit
infusions, which came onto the scene years ago, are still
great sellers. And at Porters Bar and Grill near the Fleet
Center, owner Matt Sullivan points out that even with all
the trendy cocktail choice everyone has, Captain Morgan and
Coke is still a very popular drink with this age group.
Overall, though, whether at a pub or a club, up-drinks
currently rule the scene with flavored vodkas and rums,
liqueurs and cordials, being the main
ingredients.

CANDY
COCKTAILS Sweet is
the name of the game when it comes to today’s hot trends.
With the amount of sugary products – from cereals to sodas –
being hawked at this group for most of their life, it’s no
wonder they have a taste for candy cocktails. With names
like Key Lime Pie, Caramel Apple and Chocolate Raspberry
Truffle, many of these sweet drinks are glorified dessert
shots, made more elegant by being served in a fancy martini
glass. But it’s about more than just drinking a fancy
cocktail with an exotic name – presentation is very
important. Glasses should be frosted and oversized, and
garnishes have become must-have accessories. In fact, order
any specialty martini and you could find just about anything
adorning your drink from sugared raspberries to gummy worms.
For aesthetics, chocolate swirls on the inside of the glass
or a color-sugarcoated rim are both popular. And bright
colors, whether in the packaging or the alcohol itself, have
proven to be very appealing to Generation Y.

the
COFFEE CONNECTION
With regards to the fruit flavor craze currently flooding
the market, Steve Rubin says that the trend can be linked to
the coffee industry. He points out that ten to twelve years
ago there was just Dunkin Donuts as the big name in town,
and little variety in taste or flavors. All of a sudden the
industry exploded with Coffee Connections, Pete’s, Starbucks
and endless varieties and flavors. Beer soon followed suit,
expanding rapidly with craft and microbreweries and an
abundance of style options. Steve says, “More flavorful
products are what people wanted – with more fruit-forward
tastes.” And, he points out, wine and now spirits have
followed this trend with fruit-flavored vodkas (and most
recently rums) being “on fire”.

GREY
GOOSE’S GOLDEN EGG and OTHER BRAND
SUCCESSES Several
brands in particular have really clicked with Generation Y.
Grey Goose, only introduced to the US in ’97, has been
phenomenally successful. Bars from Brighton to Salem all
report that Grey Goose martinis are big sellers with this
crowd. Grey Goose is a super premium spirit and priced as
such (martinis usually range from $7 to $10), yet this young
drinking demographic prefers it to other super premium but
less expensive brands. Grey Goose has done such a successful
job at creating a prestigious image for this vodka – and
prestige is very important to Generation Y – that it has
become the “one” to have in a martini. Can a 23-year-old
really tell the difference between a Ketel One martini and a
Grey Goose martini, and would they understand what
distinguishes one from the other? It’s possible but it’s
more likely that Grey Goose is so sought after because of
its image. The brand’s recent addition of vanilla, citrus
and orange flavors to their line only adds to their
marketability.

Another relative newcomer
that has burst onto the Gen Y scene is Hpnotiq, a blend of
vodka, cognac and fruit juices that’s Caribbean-blue in
color. Mainly popular in the hip-hop crowd, it is a huge
club drink even though it has a relatively low alcohol
content (34 proof). A recent invention of a cocktail known
as The Hulk calls for Hennessy and Hpnotiq to be mixed
together resulting in a green drink with more potency.
Hpnotiq also does very well in retail sales, according to
Steve at Huntington Wine & Spirits. And, as a result of
The Hulk trend, his store sells much more Hennessy than it
used to – and Hennessy isn’t cheap.

Jagermeister is another
spirit that has been doing record numbers over the last
couple of years. Although it has been around for a long
time, it has recently become a big seller again both as a
shot and as a mixer. Jagermeister has been busy with
promotions – Jagermeister on tap, music, motorcycles and
more – to increase their visibility with great results. A
shot called the Jager Bomb (a glass of Red Bull with a shot
of Jagermeister dropped into it) is currently one of the top
shots out there for this age group.

Energy drinks (specifically
Red Bull) have become a part of the cocktail culture over
the last few years. Red Bull and vodka is still popular,
though mainly with the younger Generation Y’ers. But while
Red Bull sells well in retail stores, many bars shy away
from carrying it because of the extreme hyper effect it has
on drinkers.

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Y’ERS
and WINE Now more
than ever, wine has become part of a lifestyle with these
young drinkers. Wine drinking has always had a certain
cachet to it, and this group very much wants to be perceived
as sophisticated as their elders. Christine Zecker, the
Director of Retail Sales for Yankee Spirits remarks, “The
wine business of today has changed. A lot of advertising is
targeted to this age group. There is much fresher labeling
to appeal to them, and young people really want to learn
more about wine.” She notes that her top two wine
consultants in the store are both Gen Y’ers whom she
describes as extremely wine educated. They are avid
enthusiasts and have dedicated substantial time to learning
about intricacies of varietals as well as the laws governing
winemaking. They can also relate well to other young
shoppers. Yankee Spirits offers an education series that is
inexpensive and very appealing to younger drinkers seeking
to learn more about wine.

Christine does note that
buying and collecting more expensive wines is mainly
something drinkers in their late twenties and early thirties
begin to do when there is more disposable cash. At both
Yankee Spirits and Huntington Wine & Spirits the average
sale for this group for a bottle of wine is in the $15 and
under range.

Bar managers in general
noted that while wine consumption is up, most drinkers under
the age of 25 are asking for varietals as opposed to a
specific brand. They mainly ask for Chardonnays and Merlots,
although Pinot Grigio and Shiraz have also become more
visible. Brands such as Mondavi, Clos du Bois and Kendall
Jackson sell well mainly due to name recognition. Champagne
and sparkling wines are increasingly attracting younger
drinkers. The recent introduction of single serving bottles
and cans of bubbly (especially pink) have proven to be
particularly attractive to Generation Y.

the
CHANGING FACE of BEER
Although beer, long a staple of the twenty-something’s diet,
has found its sales somewhat dented by the popularity of
spirits, it is still a big seller with Generation Y. At
Yankee Spirits they hold frequent beer tastings, which Dan
Demuth says are a great draw to younger enthusiasts. They
have the opportunity to come in and taste many different
beers they might not otherwise be exposed to. After the
tastings are over the store puts the top 3 beer favorites on
special. The store is very involved with promoting awareness
and the tastings generate a great turnout. Steve Rubin at
Huntington also finds that his beer drinkers are a
well-educated group. He says, “They really have an interest
in the quality of beer and how it is made.” In terms of what
is being bought, Steve Rubin remarks that while micro brews,
such as Magic Hat, Harpoon and Sierra Nevada, do well for
small sales, when it comes to buying big it’s all about
economy and the 30-pack of cans.

RETRO
COOL VERSUS DIET DOMINATION
Over the last year or so, it has become very trendy to drink
beers such as Pabst Blue Ribbon and Miller High Life. If it
was in style twenty or more years ago, it’s cool now. The
PBR craze has gone coast-to-coast with relatively no
marketing being done by the brand. Yes, it’s cheap, but
there have always been cheap beers available. This has more
to do with an image of blue-collar casual that this group
has decided is hip. Margie Duignan, the bar manager at
Orleans in Somerville says that while their martinis and
mojitos are a big draw, their PBR on tap is a huge seller.
But as popular as the retro and craft beers are, little can
compete with diet fads, particularly the low-carb frenzy
currently sweeping the nation. Michelob Ultra, Miller Lite
and Bud Lite all currently dominate the beer scene with new
low carb beers seeming to hit the market weekly. At Yankee
Spirits Dan says that all of the “ultra” beers do very well,
and that their Miller Lite sales are up 50%. In the bars it
is also all about light and low carb beers, for both men and
women in this age group.

the
TREND SETTERS While
ad campaigns and promotions certainly help establish a
brand’s name, Alex Steppacher with Future Brands says that
it is creative bartenders who can be attributed with
starting today’s hottest drink crazes. Because they are
usually the first to come into contact with a new spirit,
bartenders are in a position to get a product seen and
tasted. Alex devotes a substantial portion of his time to
working with his accounts, and specifically bartenders,
generating awareness, keeping his eyes on the trends and
helping to foster them. It’s quite important for sales reps
and brand managers to allocate time to working with bar
staff to create drinks, offer enticements and promotions.
After all, the Cosmopolitan started somewhere and look what
happened there!

Heather Dalton, at The
Place, remarks that trends often catch on through
word-of-mouth. Someone has one drink at a bar and then asks
another bartender somewhere else to duplicate it. She also
says that big chains, such as TGI Fridays and Chili’s start
drink trends. These restaurants typically have marketing
departments that come up with new, tasty drinks and then
create cocktail menus that go on for pages. Variations and
spin-offs at other bars soon begin to occur.

the
WRITTEN WORD
Magazines, such as Wine Spectator, Boston Magazine, the
Improper Bostonian and Bon Appetit are a great way for
Generation Y to discover what’s hot as well as learn about
alcohol. All of these publications and more routinely devote
editorial to cocktail, beer and wine trends and reviews. Dan
at Yankee Spirits finds that this group is very well read
and that this definitely affects what they buy. They know
what they are looking for when they come into the store.
There is also an entire industry of specialty books on
everything from hosting cocktail parties to craft
brewing.

CUSTOMERS
for LIFE The sheer
volume of brand choices today is staggering. Previous
generations had much less to select from and as a result
there was much more brand loyalty. Bearing this in mind,
there is a unique opportunity here for those in the beverage
industry. With an inundated market and a young, eager
drinking crowd, now is the time to woo drinkers and
establish brand loyalty. There’s a difference between buying
for the price tag and understanding what gives a product
quality. As more and more young consumers take the
opportunity to become educated through seminars, tastings,
adult Ed classes and by reading magazines, the time is ripe
for brands to go after them to try and obtain brand loyalty.
An example of a product that has well-established loyalty
across different ethnic, financial and age brackets is
Absolut vodka. Aside from the Cosmopolitan phenomenon, it
has international brand name recognition and respect.
Absolut caters to many different markets – most recently
coming out with a 12-page wedding planner for gay and
lesbian couples. Their appeal is huge and has given them
their established place in the market.

Generation Yers are
different from their predecessors and they need to be
treated that way. They have seemingly bypassed the so-called
novice stage of drinking and jumped right to savvy. Of
course, bad beer, cheap wine and rock-gut tequila are still
consumed, but overall, this is not a group of consumers to
be dismissed. With each passing year another 4 million turn
legal and they are ripe for the picking.