Expect Millennials to Continue Drinking Heavily

Looking through the flood of beer-related emails in my inbox, I was amused to see a story announcing the possible end of craft beer. Hey, I realize click bait is a fact of life these days, and I make a conscious effort to steer away from those links. But this was too good to ignore.

The crux of the story is that the millennial generation is moderating its consumption of beer and other alcoholic drinks. This news comes via a poll of 5,000 drinkers, age 21-35, in the UK, US, Mexico, Brazil and the Netherlands. 75 percent of these folks say they moderate their alcohol consumption most of the time because it improves their quality of life.

Heineken has actually launched a "Moderate Drinkers Wanted" campaign designed to tap the supposedly shifting millennial values. You may have seen the ads, which have been airing during sporting events and similar programming. Heineken apparently thinks the good citizen motif is worth something.

The whole thing comes as a huge surprise to me. Most of my experience mingling with these folks at festivals, bars and such is that they exert little self control when it comes to drinking. Maybe the poll sample wasn't large enough to be representative. Or maybe Oregon millennials weren't polled.

Of course, if millennials really are throttling back on alcohol consumption, it's bad news for craft beer. Because these folks are probably the biggest driver of the crazy, off-the-hook growth we've seen over the course of the last few years. The industry desperately needs them!

The reason these folks have pushed growth is they are aggressively promiscuous drinkers, constantly searching for new flavors, innovative styles and bizarre interpretations of almost anything drinkable. You might say they'll try anything once. Or twice.

It's really hard to imagine a scenario in which millennials seriously cut back on their drinking. These folks may be fickle and probably are more prone to shifts in attitude and habit than prior generations. But there are a lot of things driving their drinking.

Such as the fact that many American millennials have been saddled with tremendous education debt. Many don't and won't own a house or car. Due to unfunded liabilities in public and private retirement funds, millennials will be asked to finance the retirement of the baby boom generation while working shitty jobs in a downsized economy. And don't forget the trampled environment and corrupt political system they're inheriting.

These kids have got a tough road ahead and it's going to drive them to drink. The only real danger to craft beer is that millennials will shift to hard liquor. They're going to need it.

Millennials and Craft Beer in the Digital Age

It's hardly a secret that Millennials are a force to be reckoned with in modern American business. They make up an increasingly significant portion of the 25-45 age group business covets and targets. This is as true of the beer industry as any other.

The problem for business is the Millennial demographic is not receptive to traditional marketing strategies and tactics. You cannot effectively reach them via print, radio or television advertising. One might argue that's because they are fixated on computer, tablet and phone screens. But never mind.

There are a lot of things businesses have to keep in mind with Millennials and plenty of places to find that intel if that's your thing. Generally speaking, these kids identify more personally and emotionally with brands than prior generations. They demand to interact and be part of the brands they respect.

The platform that makes this stuff happen is provided by the combined emergence of the smart phone and social media, which allow good and bad experiences to be widely spread electronically in the blink of an eye. This kind of instant publicity was unheard of 10 years ago. Today it drives the success of many businesses...and Millennials are heavily immersed in it.

When it comes to beer, Millennial tastes are vague and transient. They want to experience a wide range of flavors, which means they are receptive to inventive approaches and bizarre blends, and somewhat bored by traditional styles. In short, they are regularly looking for something new and different.

That reality is forcing suppliers and retailers to radically increase the number of available choices. A reliable industry source expects the number of SKUs on the market to double within 10 years. That's a significant increase given there are already something like 10,000 SKUs out there.

These changes mean chaos for big beer, whose leadership is dominated mostly by folks who have been around for 20 or more years. Age alone isn't the issue. The more serious problem is they are stuck in an antiquated mindset. Expensive ad campaigns and traditional media are yesterday's news...they fall flat with Millennials.

Craft beer is another story. Small breweries and pubs never had the luxury of using expensive, traditional media. Building a brand identity took years. Then came social media and the smart phone. Today, craft-centric businesses are leveraging the digital space and effectively engaging with the all-important Millennial demographic. Craft brands are being built quickly, almost overnight in some cases.

In other words, the brand building shoe is now on the other foot. Being small and unable to afford expensive advertising tactics has put the little guys ahead of the big guys in the digital, Millennial age. If nothing else, you have to appreciate the irony.