Beer Industry Mourns Lost Youth

The past week saw numerous headlines about the beer industry’s recognition that it has lost its iron grip on a key demographic group: young adult consumers. While we called that out earlier this year, the candid comments made by several speakers at last week’s National Beer Wholesalers Association annual meeting in New Orleans point to heightened concern about the current situation and future prospects for the major domestic brands.

They have reason to be so concerned. The drink portfolio of today’s young adult consumers ranges from moonshine to malbec, from PBR in a can to Samuel Adams Utopias in a tasting glass, with a dirty martini and some type of cider-and-Fireball combination thrown in for fun. Bottom line: The consumer group once owned by the major brewers now spreads the love among spirits, wine and beer, and beverage selection is driven not only by cost (this is an economically squeezed group), but also by occasion, desired flavor attributes, food and the suggestions of those around them.

Beer has not lost the Millennial generation, however, and the industry does have a good grip on the Gen Zers now coming into legal age. These are the consumers who are driving the trends evident in our BeerTAB and BarTAB reports: craft beer’s continued growth, imported beer’s upward trajectory, the expansion of select super-premium domestic brands and the ongoing appeal of retro-hip brands.

The difference is that the beer industry as a whole—not just the major brewers—now competes with spirits and wine both in the retail store and at the bar. Beer is not really losing young consumers; it’s just earning fewer of the cohort’s occasions.

The consumer’s moment of truth in the what-to-drink decision is the new point of competition, and spirits and wine brands are scoring more wins with young adults than ever before. Beer remains the most-consumed adult beverage, even by Millennial and Gen Z consumers. Beer brands and styles that deliver on the attributes—which vary by occasion—that these consumers seek will earn more wins. Understanding the dynamics of the occasion is crucial to earning the occasion. In today’s environment, no marketer should take a consumer group for granted.


Donna Hood Crecca

A veteran of the foodservice industry, Donna Hood Crecca leads the firm’s Convenience Store Practice and is active in its Adult Beverage Practice. She develops research-based insights and recommendations for leading and emerging supplier and operator companies to enhance their go-to-market and product development programs and strategies.

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  1. There’s no denying that food and its exploration is a particularly low-cost and risk-free way to engage with the world around you. It’s a small indulgence that today’s Millenials can afford – both from their wallet and on their conscience.

    On this point, I believe young consumers are more apt to forge a relationship with a brand than with a single product. I don’t think the beer-drinker who ONLY drinks Budweiser or whichever beer exists anymore.

    A brewer like Sam Adams captures this moment well. Sam Adams releases 4-5 beers on a seasonal basis (Summer Ale and Octoberfest notably) along with a continued (and ofen notable) selection of short-run beers. Sam Adams also markets their beers seasonally in multi-unit ‘variety packs’ – such as the yearly ‘Harvest Collection’.

    Few craft business can mirrror the production muscle of Sam Adams (Boston Beer) – but the larger point is that today’s consumer craves easy access to variety and rewards brands that help them experience it with a fealty that they don’t extend to any one product in particular. They are likely even willing to forgive a ‘miss’ as at least having been worth trying ‘something new’.

    I don’t work with consumer products, but I often advise restaurants I work with to explore seasonal or ‘limited-run’ items OF ANY KIND. Because when you help a customer experience novelty, these days that puts you squarely on their side.

  2. avatar Donna Hood Crecca says:

    Good point: seasonals and limited-time beer or any such beverage can spark consumer interest and provide them something unique. Very important in today’s hyper-competitive environment!

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