As beer continues to struggle, wine is having a heyday, and cannabis eyes the industry, but what are young consumers considering their favorite alcoholic beverage brands today?
Another year, another round (after round) of bad news for the beer industry. Back in January, Budweiser reportedly lost its crown as the “King of Beers,” dropping to the fourth best-selling beer brand in the U.S.—and Millennials were blamed, as UBS data shows Millennials are less likely to recommend Budweiser than other generations. In May, the Wall Street Journal reported that U.S. beer volume was “sharply lower” for the first quarter of 2018 year-over-year for three major brewing companies: Molson Coors Brewing Co., Anheuser-Busch InBev SA, and Heineken NV. Young consumers were again cited as the root cause. In August, MillerCoors halted production of the beer they made for Millennials—just six months after they launched it. The brew, Two Hats, featured pineapple and lime flavor varieties with low alcohol content and a price point to match. MillerCoors thought the new product would “build the next generation of beer drinkers,” but it didn’t pan out.
In the third quarter of 2018, Bud Light reportedly lost .9 percentage points of total market share while Budweiser lost .35. Even the once beloved beer of young hipsters (remember them!?) has fallen on hard times, with Grub Street recently writing that PBR could “go extinct.”
According to AB InBev, beer consumption among 21-27-year-olds dropped from 67% in 2006 to 43% in 2016, and according to Euromonitor, beer consumption among 21-24-year-olds has dipped about 3% per year for the past 15 years. The story is being told again and again: young consumers are switching from beer to spirits and wine, and when they do drink beer, they’re opting for craft brews from indie brands—sorry, big beer. We’ve seen their preference for wine paired with their love of craft beer over major brews reflected consistently in our own surveys—and in our most recent survey on drinking and nightlife, we checked in on these spirits industry trends once again, asking 21-36-year-olds, “What is your favorite alcohol beverage brand?”* Here’s what they told us:
*This was an open-end response question to allow us to capture the full range of alcoholic beverage brands that Millennials 21+ say are their favorites—without our preconceived ideas shaping their responses. As with any qualitative question, the responses include those that are top of mind and those that are most popular. The lists are ordered according to number of responses received, and alphabetically when ties occurred.
What Is Their Favorite Alcoholic Beverage Brand?
1A. Craft beer
1B. Wine brand
2. Budweiser / Bud Light
3. Corona / Corona Light
6. Jack Daniels
9. Craft cider
10. Angry Orchard
11. Sam Adams
15. Mike’s Hard Lemonade
16. Captain Morgan
18. Blue Moon
20. Jose Cuervo
This year, wine and craft beer continued their reign—actually tying for first place on our ranking of their favorite alcoholic beverage brands. Last year, wine (which we combine individual label mentions of to represent their interest in wine brands overall) was at the top of the list as well.
Interestingly, though craft beer continues to be a favorite, the boom has slowed down. The Brewers Association found that 1,000 small breweries opened in the U.S. last year while 165 closed; that means 2017 had a 2.6% closing rate, 42% more than 2016. That said, young consumers’ demand for craft brews hasn’t waned. Not only are new competitors crowding the space, but major brands are buying in too (like Anheuser-Busch InBev, which bought Goose Island)—naturally leading to a slowdown from the initial craft beer craze. The trend is also being continued by brands, who want in on the action. This year, a bevy of brands were betting that unlikely beer collabs would win over young consumers. Planters made a peanut-flavored “Mr. IPA-Nut” brew, IHOP leveraged fall feels for its pumpkin spice pancake flavored stout, and Dunkin’ launched a Coffee Porter at select stores.
Meanwhile, wine is taking over beer’s lost share of the alcohol market, and data indicates that Millennials drink almost half the wine in the U.S. According to a Daily Dot study, they’re drinking 42% of the wine in the country, and almost half of Millennial women say they prefer wine over any other alcoholic beverage.
Wine and craft beer may be enjoying their heyday, but there is even more competition on the horizon: Cannabis is coming to the beverage industry. Glossy reports that Dirty Lemon’s line of CBD beverages sold out its first 20,000-bottle production run in just two days, making it the company’s strongest drink debut ever. California Dreamin’ is also riding the weed wave by adding THC to soda for “a healthier alternative to drinking beer.”
Some in the industry aren’t going to be left out of the shift. Corona’s parent company has poured $4 million more into the future of weed-based beverages. With the investment, Constellation Brands has upped their share of Canopy, a recreational and medical marijuana company, from 10% to nearly 40%. Constellation Brands’ CEO is calling cannabis drinks “potentially one of the most significant global growth opportunities of this decade.” Canopy will be developing “pot-infused, non-alcoholic beverages,” which Heineken and Molson Coors are also dabbling in.
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