Beer sales head down as mil­len­ni­als opt to un­cork more wine and spir­its

The Denver Post - - BUSINESS - By Gene Marks

Think­ing of open­ing a craft brew­ery or a bar? You might want avoid tar­get­ing mil­len­ni­als in your mar­ket­ing — and def­i­nitely cut back on the beer.

Gold­man Sachs re­cently down­graded the stocks of two ma­jor brewers — Bos­ton Beer Com­pany (the mak­ers of Sam Adams and An­gry Or­chard cider) and Con­stel­la­tion Brands (the third-largest beer com­pany in the United States, and one known for im­port­ing Corona and Modelo) — due to “slug­gish sales,” ac­cord­ing to a CNBC re­port. The cul­prit? It’s the mil­len­ni­als.

Ap­par­ently, younger gen­er­a­tions aren’t drink­ing as much beer as they used to. The data shows they now pre­fer wine and spir­its in­stead.

Re­search firm Nielsen showed a slight de­cline in beer pen­e­tra­tion across the United States com­pared to 2016, al­though wine and spir­its pen­e­tra­tion stayed about the same. But Gold­man’s re­search re­vealed a shift away from beer to wine and spir­its amongst those 35-44.

The beer busi­ness seems to be fiz­zling else­where too. As re­ported last month by the BBC, the In­ter­na­tional Wine and Spir­its Record re­vealed a de­cline in beer sales world­wide, even though global gross do­mes­tic prod­uct in­creased 3.5 per­cent in 2016 and eco­nomic growth “usu­ally cor­re­lates with in­creased al­co­hol con­sump­tion.” China saw its sales of beer fall 4.2 per­cent, Brazil’s de­clined 5.3 per­cent and even Rus­sia’s beer sales de­clined al­most 8 per­cent.

It’s not just wine and spir­its that are catch­ing the at­ten­tion of mil­len­ni­als. Let’s not for­get the grow­ing le­gal­iza­tion trend of mar­i­juana too. Ac­cord­ing to the CNBC re­port, there was a “notable in­verse cor­re­la­tion with cannabis use” as more peo­ple ap­par­ently turned to weed over al­co­hol.

Gold­man Sachs is pre­dict­ing a sales de­cline in the over­all U.S. beer mar­ket in 2017 and, as a re­sult, Bos­ton Beer and Con­stel­la­tion Brands have seen a drop in their re­spec­tive share prices.

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