MILLENNIALS DOWN ON BEER
IT’S NO SECRET that things are a bit grim for the macro brew industry. Anheuser-Busch and MillerCoors have been reporting sales declines for years as consumers switch away from big beer brands toward craft beer, wine and spirits. Some analysts have blamed the recession’s impact on blue collar workers – traditionally the most enthusiastic drinkers of domestic beers – for slumping sales, and have argued that an improving economy will help the domestic beer industry turn around. A recent report by MorganStanley supports that theory. But it also highlights some demographic trends that predict more bad news for macro brewers.
The company found that consumers of all stripes intend to buy less beer going forward. A whopping 24 percent of consumers surveyed in 2O15 said that they plan to decrease their beer consumption in the next year, while just 8 percent said they plan to increase it. The trend is especially marked among the young. Millennial consumers are less interested than their older peers in macro beer and increasingly prefer wine and spirits. Any affection millennial consumers have for beer is waning fast: In 2O12, 33 percent surveyed cited beer as their favorite beverage, but only 27.4 percent said so in 2O15. This reaffirms earlier research.
Anheuser-Busch, for its part, has made significant efforts to market to millennials by launching social media-focused ad campaigns and new styles of beer designed to appeal to their eccentric tastes. Still, the picture painted by the report isn’t all grim. The bank’s researchers noted that beer imported from Mexico, especially from segment leader Corona, has been booming in popularity in recent years. The share of consumers who drink Corona Extra climbed from 31 percent in 2O14 to 36 percent in 2O15, a steep rise in just one year. Moreover, some of Corona’s biggest fans are millennials and Hispanics, two groups that are projected to grow in coming years. But barring a major shift in preferences, domestic beer may no longer be the reigning king. Wine, and craft beer, are the heirs presumptive.
