Monday, December 10, 2007

Are You a Millenial?

A Millenial. That's a pretty weak "generational" name. There was "The Greatest Generation." The "Baby Boomers". The "Me Generation". The "Generation X". And, now, "The Millenials". As far as names go, they seem to be getting weaker. Gen-X is pretty lame - it's non-descript and has fostered a whole line of "X" products that really leaves me wondering when a brewery is going to start using "X-TREME Pale Ale" anytime soon (there are two XTreme Beers: an Xteme Kriek and the awesomely titled Red Dragon Xtreme; Ironically, both of these beers are styles known for not being extreme - a fruit beer and a helles lager, respectively).

Anyway. There some news that Millenials, those currently between the ages of 21 and 30 (or at least that's the age relevant to us), are connoiseurs. They purchase premium products at a much higher rate than previous generations. According to reports, this generation spends 28% of its dollars on imports, and another %15 on craft beers. Over 40% of their spending is on foreign or crafts. That's a lot. As a comparison, the "older" generations spend only 15% of their beer dollars on imports and only 6% on crafts. Interestingly, Millenials are spending less money on beer, though. While the "older" generations have moved 6% of their alcohol spending to wine or spirits, the Millenials have moved 12% of their spending from beer to wine or spirits (27% spirits, 26% wine - the article is unclear which of these gained most from that 12% loss).

So, now that we've dutifully reported the news, the more interesting question is why?

I'll take a stab at a guess, and you can post comments whether you agree or disagree (also, if you post, let us know if you are a Millenial or not - for the sake of disclosure, none of the full-time members of MBR are millenials, though many of our correspondents are). I have two guesses at reasoning:

1) Generation X is pretty well-known for its aversion to mass-market products. They are a very difficult generation to market to because of this; there's a high loyalty factor, but there's also a high suspicion of anything that is "too" popular. So, this accounts for some of the "lack of movement" in the "older generations" - the loyalty factors keeps those generations, who have been with their products longer, from moving easily. But, this also plays into the Millenial issue. I have a theory, and it's unsupported by anything other than my own empirical observations - most Millenials are younger siblings of Gen-Xers. The attraction of that "underground" hit has rubbed off, but also at a time when there are simply more choices. Gen-X is one of the most entrepreneurial generations in decades - they are the ones starting many of these craft breweries. As a result, there are simply more "underground" choices for the Millenials to choose from.

Playing into this is the notion that Millenials are very status-conscious and easy prey for "lifestyle" marketing. Thus, the craft breweries are able to gain traction with marketing campaigns that focus on the high-quality, high-value, underground lifestyle that appeals to Millenials. To wit: notice even the marketing campaigns of the major breweries - particularly Budweiser with their Bud Select and "premium lager" campaigns; not to mention Miller's "award winner" campaigns. There is value in marketing to this younger generation the "premium" nature of the product. This value did not (does not?) exist for Generation X because of that generation's "imperviousness" to marketing, particularly from majors.

2) The second reason is less of an attitude issue, but related. The simple fact is, there are more choices in the marketplace. When the older generations were "coming of age" their beer options were limited: Miller, Bud, Coors, et al - and the only "crafts" available were Sam Adams or Sierra Nevada nationally and Leinie's regionally (and to a lesser extent, Great Lakes, Bells, or Goose Island). Imports were pretty much limited to Heineken, Corona, or Amstel. But the explosion of the American Craft Brewery has largely been driven (as mentioned above) by Baby Boomers and Gen-Xers frustrated by this lack of choices, but who see business opportunity at least as viable, if not more so, as the wine industry boom of the 90s.

So, what do you folks think?

1 comment:

  1. I suppose i'm a "millenial". In fact, when i first read you post, i thought that spending "28% of its dollars on imports, and another 15% on craft beers" was in relation to overall income, and I didn't bat an eye.

    Actually, i might reverse the ratio between imports and crafts. I suppose in those stats a big part of "imports" includes Corona, Heineken, and Guiness (the Guiness you buy here is brewed in Canada).

    Here is my absolutely scientific breakdown.

    Midwest craft beers: 50%.
    Euro and Quebec beers: 25%.
    Non-midwest craft beers: 20%.
    Cheap domestic cans (mostly midwest, mind you): 5%.

    Regarding "underground lifestyle" marketing: One of the best things about some Midwest craft breweries is the distinct /lack/ of marketing. Breweries like New Glarus Lake Louie and Central Waters have among the best (i.e., least) marketing of any craft brewery. I have a hard time buying Ale Asylum beer simply because i get the feeling that a big chunk of my beer dollar is going towards their marketing and label design rather than ingredients or brewing labor. Then again, i'm guilty of reaching for a beer at the liquor store simply because it has Frank Zappa's picture on it.


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