Macro-brews are in dire straits. Anheuser-Busch and MillerCoors have been reporting precipitous sales declines for years as consumers have switched away from beer brands like Budweiser, Bud Light and Miller Light toward craft beer, wine and spirits.
Some analysts have blamed the recession’s impact on blue collar workers — traditionally the most enthusiastic drinkers of domestic beers — for slumping sales, and have argued that an improving economy will help the domestic beer industry turn around.
A recent report by MorganStanley, first reported upon by Business Insider, supports that theory. But it also highlights some demographic trends that portend more bad news for macro-brewers.
MorganStanley found that consumers of all stripes intend to buy less beer going forward. A whopping 24 percent of consumers surveyed in 2015 said that they plan to decrease their beer consumption in the next year, while just 8 percent said they plan to increase it.
The trend is especially marked among the young. MorganStanley found that millennial consumers are less interested than their older peers in macro-brews, and that they increasingly prefer wine and spirits. Any affection millennial consumers have for beer is waning fast: In 2012, 33 percent of millennials surveyed cited beer as their favorite beverage, but only 27.4 percent said so in 2015. This reaffirms earlier research that’s shown that millennials have little affection for macro-brews.
Anheuser-Busch, for its part, seems aware of its lack of popularity among young drinkers. The company has taken pains to appeal to millennials by launching social media-focused ad campaigns and new types of beer designed to appeal to their eccentric tastes.
The picture painted by the MorganStanley report isn’t all grim. The bank’s researchers noted that beer imported from Mexico, especially from segment leader Corona, has been booming in popularity in recent years. The share of consumers who drink Corona Extra climbed from 31 percent in 2014 to 36 percent in 2015, a dramatic rise in just one year. Moreover, some of Corona’s biggest fans are millennials and Hispanics, two groups that are projected to grow in coming years.
Still, the writing is on the wall. Barring a major shift in preferences, domestic beer is on its way out. Wine, and craft beer, are its heirs presumptive.
By Joe Satran
Source: The Huffington Post