As millennials come to age, numerous sectors such as the alcoholic beverage industry are seeing major consumption changes and trends. The professional millennial cohort is the agent of change in this industry. The social work culture with after -hours drinks are the new norm for this non-materialistic generation. The digital savvy consumers are constantly sharing their life experiences through social media channels and these experiences are shared with alcoholic beverages, all representing a social status.
Millennials can be divided into two categories
Segmenting millennials into older (30 to 38 years old) and younger (21 to 29 years old) groups reveals substantive behaviour differences when looking at wine consumption behaviour. Millennials inhabit two significantly different life stages: Younger millennials are starting careers, while older millennials are more established in their lives, many with young families. This affects purchasing power, occasion usage and frequency versus other alcoholic beverage categories. Marketers need to hone in on which of the groups they are targeting and develop specialised strategies against each beyond just saying “millennials.”
Women Spend More
In dollar volume, women under the age of 36 make up 22% of the wine spend compared to men under the age of 36 at only 12%. This is a huge difference. Women tend to be more open to innovation in wine, and are more willing to try different types too.
The Rise of Rosé
Millennials are increasingly swapping a can of beer for a glass of rosé wine. The rosé category reached a valuation of US$389 million in January, based on Nielsen data. Rosé consumption increased 57% in the last 52 weeks in dollar terms. While the amount of rosé sold in the U.S. is a fraction compared to the US$37 billion beer industry, rosé wine upstart’s success is yet another trend taking the U.S. by storm. Interestingly, beer penetration fell 1% from 2016 to 2017 in the U.S. market, while both wine and spirits were unmoved, according to Nielsen ratings.
Value and the Experience
Alcoholic beverages are exponentially growing both in volume and value. As millennials come to age, with their value-conscious behaviour, they are constantly challenging the way this industry markets towards their generation. By paying close attention to millennials’ drinking habits, especially older millennials, alcoholic beverages companies and drinking establishments have a profitable opportunity. Factors such as knowledgeable bartenders, drink exclusives, and drink specials are pivotal for millennials when choosing a drinking establishment. Understanding the shifting drinking preferences of this generation and their constant need for social functions will provide a higher value towards a brand.
According to Nielsen, the alcohol beverage category is growing better than others, exceeding overall consumer packaged goods growth in both volume and value. Ultimately, marketing tactics that are geared towards lifestyle choices and exclusive experiences will drive millennials’ interest. The ultimate goal for alcoholic beverage companies and drinking establishments is to understand the millennial mindset in order to succeed in sales with this generation and create brand loyalty.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.