While the phrase “beer me” will always have more of a ring to it than “Chardonnay me,” people are opting for wine and spirits over beer more and more. In fact, according to Fortune, AB InBev, Heineken, and Molson Coors all reported significant drops in beer volume in the U.S. in Q1 of 2018, while market share for spirits has steadily increased since 2010 and wine market share has stayed consistent.
There are many factors contributing to this trend. Honestly, though, just blame it on those pesky millennials – according to Forbes, they consume less alcohol than generations before and when they do drink, they’re more likely to choose a wine or spirit over beer. Sorry, everyone, my generation is back at it again, recklessly ruining traditions. Just with more refined palates.
That’s not to say the gigantic beer industry won’t go down without a fight. I decided to look into some ways the beer industry is refining its marketing and business strategy:
Collaboration is king
Craft brewers are up against it, to say the least, but there’s strength in numbers. In February 2018, NY-based Five Boroughs Brewing Co. celebrated the start of New York City Beer Week with the release of “Class of 2017,” a special collaboration beer featuring nine different New York City breweries that opened during 2017. According to VinePair, collaborations between craft breweries “have gone from one-time rarity to almost the norm.” The process involves two or more breweries joining forces to make a beer, and selling it with each of the collaborating brands on the label. This lends a spirit of community and gets eyes on the collaborated beer, which ultimately raises the profile of the individual breweries. Additionally, with millennials always on the lookout for the latest and greatest, this strategy aligns with their crave for new and unique experiences. It will be interesting to see how craft brewers continue to collaborate within the coming years; though intense competition exists in the industry, it may be the sense of community and partnership that ultimately wins the day.
Forsaking the can for the champagne flute
If you can’t beat ‘em, join ‘em. Sort of. The alcohol industry by nature is pretty inventive, so it makes sense that to fix the current consumption issue, beer makers would simply… brew a solution. Beers that are inspired by alcohol from another category or seeking to appeal to tastes reminiscent of wine or cocktails are gaining steam. For example, the Brut IPA trend, which is a category of beers that mimic the bone-dry and effervescent qualities of a champagne or Prosecco. Or the increasing production of sour beers, which, according to Wine Enthusiast, appeal to “beer lovers as well as wine lovers and cross drinkers who are fond of wine’s acidic twang.”
Seven years ago, Anheiser-Busch helped launch Jay-Z’s “Made in America” music festival as its key sponsor. 2018 saw the beer giant back out of its sponsorship. According to AdAge, Budweiser, which used to spend millions of dollars promoting and staging the festival, “opted not come back this year as it sets its sights on other music priorities, like country music-themed events held at its own breweries.” And, according to that same AdAge article, Anheuser-Busch InBev spends more money than any other marketer sponsoring music tours, festivals and venues. So, the realigning of its musical priorities and demographics is significant, since the brewer’s research showed that country music festival attendees spent more on beer than at similarly sized events for other genres of music. This is indicative of a larger movement; though the Made in America festival was an opportunity to reach younger drinkers and inspire brand loyalty with a demographic whose purchase power is growing, strategically a different event made more sense given current consumption habits.It’s becoming more and more essential for large brewers to revisit where they’re putting their marketing dollars.Click To Tweet
So, there you have it – just a few ways the beer industry is diversifying its marketing and brewing strategy to align with changing consumption trends. At Padilla, we’ll be keeping an eye on these trends in the coming months and years as Gen Z gains greater purchasing power and, of course, more of them hit that all-important 21st birthday.
For more insights on communication and brand strategy, industry trends and more, subscribe today to the Weekly Buzz here.