Millennials Demand Quality, Innovation and Value in Every Glass
The following column from Jennifer Pagliara, CapWealth Senior Advisor, appeared in The Tennessean on January 20, 2017.
With New Year’s two weeks past, the Bicentennial Mall “mud pit” has been cleaned up (amazing what rain and thousands of revelers can do to a place!) and no doubt all vestiges from your own private celebratory bashes have been cleared away.
At my own recent trip to the recycling center, I marveled at the mountainous heaps of empty booze bottles. Then this weekend at a coffee shop I overheard a conversation at the table beside me. The two millennials were avidly discussing liquor. One of them said, “Even though I don’t make much money, there’s a line item in my monthly budget for good Irish whiskey. Life’s too short to drink bad alcohol,” he proclaimed. The same sentiment is true of many millennials, judging by my own friends and acquaintances.
The U.S. alcoholic beverage market has $211.6 billion in annual sales. Millennials of legal age, though only representing one-fourth of adults over 21, account for 35 percent of U.S. beer consumption and 32 percent of spirit consumption according to Nielson. The Wine Market Council reports that they consume 42 percent of all wine in the U.S. As more and more millennials turn 21, it shouldn’t surprise you that the alcohol industry is scrutinizing with clear eyes and clear heads how millennials choose to become a little bleary-eyed and warm and fuzzy inside. While drinking and driving never mixes, the unique ways that millennials are drinking is certainly driving new trends.
When it comes to shopping, millennials are value-conscious. They look for good deals and use coupons. But this does not mean they settle when it comes to quality. In fact, just the opposite is true. According to Nielson’s alcohol surveys, a large percentage of millennials reject mass-market alcohol beverages, helping to fuel the rising popularity of “handcrafted,” “artisanal,” “microbrewery,” “small batch” “single barrel” and “single malt” alcohol products. Over 40 percent of millennials equate price with quality, while only 27 percent of baby boomers do. This trend seems to be born out in wine sales. Last year, says the Wine Market Council, 37 percent of high-frequency wine drinkers purchased at least one bottle of wine over $20 per week, nearly doubling 2010’s number.
It would be a mistake to believe this penchant for quality translates as brand loyalty, however. Says Ben Steinman, president of Beer Marketer’s Insights, “Famously, the millennials are fickle. They’re seeking variety, innovation and flavor.” Wine Spectator magazine concurs, writing that “It’s not an exaggeration to say the millennial American consumer has the most varied set of tastes of any wine drinker in history … young wine drinkers clamor for diversity in regions and styles more than ever.” As is the case with much of the millennial generation’s consumption and experience-seeking habits, they’re adventurous and like to try different things.
They don’t drink alone
While a millennial might drink alone, he or she is more apt to tell the whole world about it! Of millennials who drink wine, again according to the Wine Market Council, over 50 percent talk about it on Facebook and more than a third do on YouTube, Twitter and Instagram. No doubt millennials are just as digitally gregarious about their experiences with beer and hard liquor. Millennials listen, too, eager to know what both peers and experts have to say about alcohol products. About 60 percent consider wine reviews “extremely” or “very” important, compared to about 20 percent of baby boomers.
Millennials have changed not only how we talk about things, but how we buy things, too, and that’s true of alcohol. Starbucks now offers wine. I’ve seen bookstores, movie theaters and even car washes that offer wine. And thanks to technology, there are now companies such as Drizly and Minibar that will deliver alcohol directly to you in less than an hour!
For alcohol-related businesses willing to pursue innovation, originality and quality, millennial tastes will reward them with economic opportunity. Cheers!
Jennifer Pagliara is a financial adviser with CapWealth Advisors.