Wine and Spirits are Sinking Beer

Beer. It’s the leisure drink of America. Or at least it used to be. Lately, however, beer has been losing favor among Americans.  As of July 2018, beer sales were down 3.5% over the year before. While the industry has seen a consistent decline in beer consumption over several years, many were surprised to see the accelerated fall from grace in 2018.  

Big beer brands like Miller Lite, Coors Light, and Budweiser took the biggest hit. But why? These brands have most certainly established a reputable market presence. They have longevity and historical support on their side. What is causing alcohol consumers to turn away from trusted favorites? Easy. Wine, spirits, and millennials.

Young Americans have embraced creative and innovative concepts in their attempt to create a healthier, environmentally conscious lifestyle. Things like craft breweries and distilleries, local vineyards, and newly legalized recreational product offerings hold more appeal to generations that find value in experience.

Consumers are also leveraging their food and beverage options to help elevate a given experience. Instead of the “one size fits all” attitude of the past, which served big beer brands fairly well, younger generations are selecting drinks that seem to match the occasion both aesthetically and atmospherically. This trend is especially prevalent among women, who make up a larger percentage of alcohol consumers than we’ve seen in the past.

Traditionally, wine and spirit brands are better positioned to deal with and adapt to these trend changes. Sudden shifts in consumer preferences can be addressed with less effort in these verticals. Beer, on the other hand, does not have that luxury. Let’s take a look at an example.

Suppose new research shows that some form of black cherry does amazing things for your skin. It is fairly safe to assume that much of the younger, health-conscious generation is going to trend towards products containing that particular black cherry.  Now, a vineyard can strategically incorporate the black cherry into its fermentation process to create a new flavor. A distillery can create craft batches of black cherry whiskey or vodka. In both cases, we can assume that the flavors of these products will be reasonably appealing depending on your palate.

Big brand breweries, however, will find it much more difficult to incorporate such flavors into their already well-established products. Mainstream beer possesses such a distinct flavor that it’s difficult to incorporate nuance without a great deal of spend just to ensure they develop a taste that isn’t going to send consumers running in the other direction.

At a summit late last year, several big beer brands discussed the need to rebrand beer as a whole in an effort to impact America’s changing preferences. Several brands agreed that individual advertising would be counterproductive and that a campaign should be launched to elevate the general concept of beer in the eyes of the American public. The effort, however, was waylaid when several brands got involved in what has become known as “the corn syrup war” during a Superbowl Ad. Bad for beer. Good for wine and spirits!