Millennials don’t like beer as much as older generations — and it’s creating problems for the industry.
On Wednesday, UBS released its evidence lab’s third annual survey of roughly 1,200 US alcohol consumers. One of the survey’s areas of focus: how millennials feel about beer.
The beer industry has been plagued by millennials’ relative lack of interest. Beer penetration fell 1% from 2016 to 2017 in the US market, while both wine and spirits were unmoved, according to Nielsen ratings.
UBS’s survey of how likely millennials are to recommend different beer brands provided further evidence that this generation is simply less into almost every type of beer than Baby Boomers and Gen X.
Compared to all consumers polled, every beer brand except Stella Artois, Dos Equis, and Miller have lower brand equity amongst millennials.
And, that’s not changing as the generation gets older. Recommendation rates amongst millennials went down over the last year across the board, with the exceptions of Dos Equis, Stella Artois, and Shock Top.
In late July, Goldman Sachs downgraded both Boston Beer Company and Constellation Brand based on the data that younger consumers prefer wine and spirits to beer, as well as the fact that they’re drinking less alcohol than older generations more generally.
Beer already lost 10% of market share to wine and hard liquor from 2006 to 2016. UBS believes that the trend will likely continue, writing in the research note that “big spirits brands appear better placed than big beer brands.”
“This armada of boats is coming across the Atlantic to crush us and we are shooting each other with, you know, muskets and slingshots,” Walt Dickinson, a cofounder of craft brewer Wicked Weed, which was acquired by AB InBev in May, recently said of squabbles between independent brewers and giants of the industry.
According to Dickinson, the “armada of boats” preparing to crush the beer industry is wine and spirits — an opinion shared by a number of other craft brewers who appeared in an AB InBev video on the topic. Beer giants need to win over millennials — or risk losing millions of dollars as younger Americans gravitate to wine and liquor.