Even though I wrote about how wine and spirits are pretty popular with the twentysomething generation, beer still dominates. Yet probably not in the way you think. To conclude my spring break alcohol theme, here’s a breakdown of what beer millennials drink and the forces that influence those decisions.
First things first, let me sum up the big picture: large beer brands are down, craft beer labels are up. The beer industry as a whole had four straight years of sales decline as of 2011, with big brands taking a heavy hit. NBC reports that Budweiser lost 30% of their sales from 2006 to 2010 while Michelob and Milwaukee’s Best have also lost upwards of half their sales during that time. Yet craft beers are on the rise, with sales rising 15% in 2011. Even more exciting–the craft beer niche claimed more than 5% of the national beer volume for the first time ever this year.
Who are one of the main cheerleaders behind craft beer growth? You guessed it. Millennials. We make up 21% of the adult population, but 29% of craft beer volume. Some experts hail us as the people ” who will propel the category for the next decade and beyond”. So, why are people most infamous for consuming cheap beer (aka college students and twentysomethings) turning to craft beer all the sudden? Here’s my take:
1. Quality and Price
Yes, college kids and twentysomethings are notorious cheapskates. But, as I talk about in this article, we are more than willing to splurge on fun or luxury purchases. For more and more millennials, good craft beer is becoming such a luxury purchase–equivalent to a nice glass of wine.
“There are some commercial brands that will always have demand, but more people out there are looking for quality and there’s a lot more options to choose from. That includes twentysomethings” says Christopher Miller from Ball Square Fine Wines (my favorite wine shop!) in Somerville, MA commented.
The experts seem to agree with him. An in-depth article from bar industry journal Nightclub & Bar reports, ” Younger people seem to be hit harder by the current unemployment levels so we find them drinking smarter. One high-quality craft beer instead of two bland beers comprises their night out”.
While big brands like Coors and Miller (ok ok, Natural Light and Keystone as well) have traditionally been popular with the twentysomething demographic for its low prices, rising hops and barley prices has made it difficult to keep those prices low for the end consumer. After years of minor fluctuations of a few cents, the price of hops per pound skyrocketed from $1.95 in 2005 and peaked at $4.03 in 2008. They haven’t come down much to those original levels either.
Cheap low-quality beer will always have a place in college and twentysomething culture. After all, who wants to play beer pong with something nice like Sam Adams? But for a night out at the bar, buying a quality beer for $7 beats a $5 Bud. Plus, your friends will probably judge you less because….
2. Individual Identity and the “Cool” Factor
Craft beer is just cooler. There. I said it. Perhaps more than any other generation, millennials love presenting themselves as individuals. Sure, in every generation, there was probably always someone who was listening to the band that no one has heard of. But we’re the only generation where that guy put it up on the internet.
The college and twentysomething years are all about forming an identity and growing into your own skin. The Nightlife & Bar article sums it up well, “Millennials have grown up in a world with lots of choices and lots of flavors…they aren’t afraid of breaking away from conventional brands and will sometimes shun larger brands so they can express their individuality in their choices.”
Drinking “good” beer and speaking educatedly about the beverage also is a sign of growing up, which I argue here and here is a very important behavioral motivator for millennials. It’s a way for later college students and twentysomething working professionals to say, “Yes, I drank Natty Light back in the day when I didn’t know better, but now that I’m smarter and providing for myself, I prefer a Dogfish ale or a good IPA”.
3. Social Media
Obviously, most craft beers don’t have the advertising budgets of bigger brands. Instead of funny television ads, they’ve turned to social media. Aka, where millennials spend a good portion of their time.
Social media adds to craft beer’s “cool” factor. It allows users to connect beer brands with their identities in a fun way. For example, one of my favorite blogs, BuggsLife Music, recommends what beer to drink with the music they recommend.
Using social media has also increased craft beer’s emphasis on quality. For example, with websites like Pintley, users receive recommendations based on beers that they already like and are encouraged to share their findings with friends online through reward points. Craft beers that would have never been on their radar are suddenly available. The fact that they are recommendation-based also means that the users are more likely to enjoy the recommended beer and purchase another six pack in the future.
Big brand advertising lately has focused primarily on wit and humor over quality–and it’s not doing them any favors with millennials. One AdAge article attributes advertising to big beer woes, quoting Frank Politano, VP-sales and marketing for Kohler Distributing Co. saying, “Maybe not enough beer commercials are talking about the relevance of the beer and what the beer is about and too many [are] about the joke.” The fact that Miller recently pulled their “Man Up” campaign, paired with low sales, indicate that big beer brands aren’t getting it.
There will always be a home for cheap low-quality beer in the twentysomething demographic. But don’t be surprised to see craft beers continue to grow as this trend amplifies. After all–only half the millennials are of drinking age.
Thanks for reading and I hope I didn’t make you too thirsty! Lindsey Kirchoff.