Well this is interesting. Wineries have been fretting for years about the competition from craft beer especially with respect to millennials. But, as reported by CNBC, the investment firm Goldman-Sachs has downgraded Boston Beer Company and Constellation Brands because millenials aren’t buying what they’re selling.
“We view the shift in penetration and consumption trends as driven by a shift in preferences in the younger cohorts,” added Zhuo. “The youngest demographic (<35 year olds) overall penetration rates are not increasing. The 35-44 year old cohort shows a shift away from Beer to Wine & Spirits.”
I wonder why? Might it be because craft beer increasingly tends to taste like grapefruit juice? (Sorry IPA fans but let’s be honest.)
But another reason might be the one I wrote about on Monday. Industry consolidation is putting pressure on the craft beer market. With 5 companies tallying 80% of the beer sales in the U.S., and trying to market their swill as craft beer, the whole craft beer movement is losing its credibility and cachet.
If there is a single thing millennials want it’s authenticity—a real connection with the people who produce their consumables and a real distinction between products that is more than marketing hype. They’re not getting that from “big beer” so they find something else to drink.
Of course, the wine industry is suffering from consolidation and homogenization as well but apparently the roughly 9000 wineries in the U.S. that are not controlled by “big wine” are having some success persuading consumers there is something distinctive about their product.
For those of us partial to small, independent wineries that is good news.