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Millennials are Killing the US Beer Industry – Their Next Victim is Heineken

Discussion in 'Beer News & Releases' started by JackHorzempa, Mar 2, 2019.

  1. JackHorzempa

    JackHorzempa Poo-Bah (3,854) Dec 15, 2005 Pennsylvania
    Society

    From the below linked article:

    “US Beer Giants are Downsizing en Masse

    Beer companies are taking a beating in the US, which explains why a number of them are undergoing cost-cutting measures. Heineken USA is not alone in the downsizing spree. Other major beer companies that have chosen to initiate job cuts in recent months include MillerCoors, Pabst brewing, AB InBev, and Constellation Brands.

    Oregon-based Deschutes, the 10th largest craft brewer in the US, also eliminated 10 percent of its total staff last December. The brewer had made expansions to its workforce after initiating some growth strategies, but they eventually resorted to the layoffs after growth outcomes failed to match their projections.”

    https://www.ccn.com/millennials-killing-us-beer-next-victim-is-heineken

    Cheers!
     
  2. Foyle

    Foyle Champion (847) Sep 29, 2007 North Carolina

    I have been saying for years that brewers (large and small) need to stop the circular firing squad and focus on the fact that younger drinkers are NOT drinking beer. This news just provides more proof that more breweries are chasing fewer consumers. Lots of brewery reductions and bankruptcies are my prediction for the next 5 years until the supply/demand equation is balanced again.
     
    ECdOc, Sheppard, horsehockey and 5 others like this.
  3. jzlyo

    jzlyo Poo-Bah (1,761) Mar 4, 2012 Iowa

    With macros, yes, Millennials are moving away from. With Deschutes and other major craft breweries, it’s a case of a few things. Freshness affects sales, especially with IPAs, and a lot of them have issues with having old stuff on the shelf, that’s why a lot people buy local brews. The big craft brewers also have to face that in several cases they tried expanding too much and misjudged the market. Craft beer currently isn’t going downhill and Millennials aren’t going away from it, it’s the macros and some big craft breweries that are losing money.
     
  4. beer_beer

    beer_beer Initiate (198) Feb 13, 2018 Finland
    Society

    Interesting, the macros going for NA. Wonder how fast it will grow in the States. They surely have the marketing potential.
     
    GreenBayBA likes this.
  5. MNAle

    MNAle Meyvn (1,110) Sep 6, 2011 Minnesota

    You're missing the point. "They" are not moving from macros to local craft. "They": are moving from beer to wine and spirits.

    From the article:
    I recall saying this in a post last year (or the year before) and it was roundly poo-poo'ed.

    Well?
     
    TrojanRB, rgordon, dennis3951 and 4 others like this.
  6. BuggyRidge

    BuggyRidge Initiate (18) Feb 26, 2019 Michigan

    Whiskey is more popular than ever and more economical than $4 micro brews.
     
  7. thesherrybomber

    thesherrybomber Initiate (169) Jun 13, 2017 California
    Society Trader

    Another reason for the rise in craft distilleries
     
  8. gr8ful

    gr8ful Initiate (82) Aug 17, 2014 Texas

    I'll
    agree with your point, but I won't "like" it.
     
  9. EmperorBatman

    EmperorBatman Initiate (40) Mar 16, 2018 District of Columbia

    Whiskey killed beer in America once before, starting in the 1790s.

    If the problem is economical, I think two things need to happen. First, the macro breweries need to make a better product, at the same price point as now, if not less; this product needs to be better in flavor using more malt, actual hops and generally less brewing shortcuts that have emerged since the 1930s.

    The second is that craft breweries need to realistic lower their price point for their pale ales, blondes, lagers, and even some shelf IPAs. I think this is one of the biggest failures so far with the craft industry, is that few craft breweries large or small has set out to make a high-quality but economical brew for most people to enjoy.

    I understand in both cases that there are serious economic considerations with scale of production, as well as how to balance high-quality ingredients and brewing practices with affordability for brewer and buyer.
     
    hopsputin, Ceddd99, Beer_Line and 9 others like this.
  10. ManBearPat

    ManBearPat Devotee (438) Dec 2, 2014 Colorado

    lol at millennial scapegoating...

    No one ever blames the behbeh boomers for being incredibly greedy and ultimately being the reason why things are the way they are today.

    FWIW- I’m neither
     
    BeardedWalrus, b11, kinopio and 28 others like this.
  11. drtth

    drtth Poo-Bah (3,753) Nov 25, 2007 Pennsylvania

    I'm neither as well, but there's a good reason nobody is blaming the boomers.

    They aren't the demographic that's never even starting with beer and just going with wine, hard cider, and things like shard flavored seltzer and Twisted Tea. (If they drink alcohol at all rather than just sticking carbonated and flavored water.)
     
    AlcahueteJ likes this.
  12. russpowell

    russpowell Poo-Bah (8,981) May 24, 2005 Arkansas
    Society Trader

    Deschutes needs to get their ass in to the Arkansas Market & then I can help them out sales-wise, also not in Oklahoma
     
  13. EastHarris

    EastHarris Initiate (44) Jan 9, 2012 Pennsylvania

    At one time every town had a brewery and now it’s finally happened again. Every time my beer fridge runs low the brewery in the next town over puts out some new beer. I go there, buy some fresh beer and in two weeks I do it again. I don’t need to buy something shipped in from Oregon or Colorado. This isn’t hard.
     
  14. jesskidden

    jesskidden Meyvn (1,412) Aug 10, 2005 New Jersey

    Well, I blame them for helping to kill the local and regional breweries but a small percentage of them also helped create many of the first "craft breweries" and certainly another portion of that generation was the primary customer base of craft beer...
     
  15. Harrison8

    Harrison8 Poo-Bah (3,154) Dec 6, 2015 Missouri
    Society Trader

    "Killing US beer" then links to an import...?

    Okay.

    This is also a false statement. Both of these beverages contain alcohol (Bud Light Orange clocks in at 4.2% ABV according to this site.)

    Posts in these forums point to beer being at an 'all time high' with a diverse selection of styles available and now all of sudden beer is dying...?

    Regardless, @Foyle called this 'millennial blaming' bullshit out early - and I agree. It'll be interesting to watch the market over the next decade, in part due to less millennials opting for beer as their alcohol of choice (as emphasized by the article). Brewer's Association has also highlighted an overall decline in beer sales, although it's been well linked in these forums. I'll link it again for repetition. Kinda makes me wonder why we're quick to point out millennials are causing market problems for beer, but not discussing how to recoup that market in a forum for advocating about beer? Makes me wonder if beer market declines are region specific...? I find myself almost exclusively at breweries and beer bars even with groups of friends made well outside of craft beer.
     
    #15 Harrison8, Mar 3, 2019
    Last edited: Mar 3, 2019
  16. MNAle

    MNAle Meyvn (1,110) Sep 6, 2011 Minnesota

    I never would've guessed... :rolling_eyes:
     
    kexp and ManBearPat like this.
  17. MNAle

    MNAle Meyvn (1,110) Sep 6, 2011 Minnesota

    Ummm... because that generation IS causing market problems for beer by not buying beer, either macro or craft, at the same rate as previous generations. Market demographic data is not "blaming"... it is stating measured data.
     
    rgordon, beertunes, JimKal and 5 others like this.
  18. Harrison8

    Harrison8 Poo-Bah (3,154) Dec 6, 2015 Missouri
    Society Trader

    This is true. I just grow incredibly tired of the 'us' vs. 'them' when this entire forum is about advocating for beer.

    Makes it more and more difficult to stick around.

    Personally, I share Crane's Tea Weiss and Firestone Walker's Luponic Distortion (fresh) to sway people into beer and hoppy beer respectively.
     
    bret717 and thesherrybomber like this.
  19. stevepat

    stevepat Devotee (494) Mar 12, 2013 California
    Trader

    It's popular click bait to accuse 'millenials' of 'killing' something these days. The article bore little resemblance to it's headline though, I didn't actually see any numbers about the difference in per capita beer consumption between generations and instead was given the impression that a lower proportion of millenials drink beer as their beverage of choice. Seems like journalistic handwringing for the sake of something to write about
     
  20. HorseheadsHophead

    HorseheadsHophead Poo-Bah (1,641) Sep 15, 2014 New York

    "You hear that sound? It's the world's smallest violin."
     
  21. beer_beer

    beer_beer Initiate (198) Feb 13, 2018 Finland
    Society

    The article is largely BS, in other words. They don't even know the difference between light beers and NA beers. Blaming the millennials is the main flaw though. "They are killing..." lol
     
  22. AZBeerDude72

    AZBeerDude72 Meyvn (1,484) Jun 10, 2016 Arizona
    Society Trader

    "And yet, this group seems uninterested in big beer brands like Heineken or Budweiser".

    Maybe those in the sample group are tired of bland boring beer? I did not see anything in the article about Craft Beer? Sounds like people today want tasty drinks, not some watery beer that is mass marketed into our culture.
    :beers:
     
  23. Giantspace

    Giantspace Defender (686) Dec 22, 2011 Pennsylvania

    My thoughts are that big beer is losing to local and regional.

    Years ago we all longed for the beers from across the country or many states away. They must be amazing, right?

    Now those beers are readily available and after trying 1-2 of each style you move on. If you find one you like enough to buy regularly it’s inevitably old and thus no new purchase.

    I think local has fixed this to a point. The problem I see with my locals is none of it is affordable. Too many $18+ four packs, $16 crowlers , not so great $13-16 six packs.

    I continue to wonder how Founders can sell 15 packs for $12-16 and make money while others can’t seem to do this.

    Thinking we will start to see more shrinking distribution and start to move back to beer being more smaller regional breweries as the not local but not top tier size move away from expansion

    Even Deschutes being the 10th largest could become smaller. I remember they were not in PA 7-8 years ago. A few beers showed up for beer week at a good case price. Now there is no way im paying $40+ for their old beer. Break it down to buying by the six pack and it’s closer to $50.

    I’m rambling a bit as I did not write any outline but I’m trying to say I see consolidation coming in beer, prices are crazy and breweries have expanded too far and become too large.

    How can I go to Milwaukee and buy amazing beer from New Glarus and pay crazy cheap prices at a grocery store ? $6.99-$7.99 for Spotted Cow and Moon Man and $10.49 for Thumb print 4 packs. I can’t even buy Prima pils for $9.99 at a grocery store.

    How can Alchemist sell amazing 4x16 for around $12 and pay a really great wage with benefits?

    At all these other breweries just over charging, bad business plans?

    Enjoy
     
    jaybomb81, tmalt, mikeinportc and 6 others like this.
  24. beer_beer

    beer_beer Initiate (198) Feb 13, 2018 Finland
    Society

    It may be when the hype is on having overpriced products is even a selling argument. The higher the price, the more you sell. A brewer's dream. Will not last forever.
     
  25. jzlyo

    jzlyo Poo-Bah (1,761) Mar 4, 2012 Iowa

    I need to rephrase, Millennials don’t drink beer like previous generations, when they do, it’s predominantly craft. A lot of that article focused on macros and a little on the bigger crafts. Saying beer is in major trouble and on the decline, two local breweries in IA/IL, Iowa City Brewlab and Blue Cat recently went out of business, but the rest of my local area’s good. Craft beer is good, macros and some major craft breweries are the ones mostly having problems.
     
  26. Oktoberfiesta

    Oktoberfiesta Aspirant (256) Nov 16, 2013 New Mexico

    So many breweries are trying to cater to a group that is both non-loyal and fly by the night shifting to both wine and spirits simultaneously. And also, just moving on to other hobbies. I've seen so many bros go all out over a two year span to where they've sort of felt they've seen it all. And they move on.

    I don't think the craft beer buyer pool has grown even 4 times as fast as brewery #s have grown. Try 1/2 as fast
     
  27. EmperorBatman

    EmperorBatman Initiate (40) Mar 16, 2018 District of Columbia

    I think there also has to be an understanding that people are simply finding other drinks serve their purposes better, both sides of the generational divide.

    There are several older men I knew who used to drink the macros and some craft but quit because they couldn’t handle it anymore - it gave them stomach problems, headaches. I think it’s the over-carbonation and the junk they put into these.

    Similarly, a lot of younger people are even experiencing the same thing to a lesser extent, but enough to reconsider extensive consumption of beer on a regular basis. Plus, the contexts for drinking have changed, and I think many young people find that beer simply drags them down when they’re out on the weekend at a party or club, hence why wines, liquors, and cocktails that give a buzz faster with a lighter feeling than beer. They’re also handier to carry and drink over a glass, can, or bottle of beer. I also think that wine and liquor companies have been very good about getting young adults to drink their product over beer, due to price, social image, and the kind of buzz they provide.

    How do you get drinkers back? Make beer healthier and higher quality, more affordable, and cultivate more of a culture around lower-key drinking settings that allow for slowness and relaxation.
     
    mikeinportc likes this.
  28. islay

    islay Aspirant (237) Jan 6, 2008 Minnesota

    I hate to break it to you, but, unless your age is misstated on your profile, you are a millenial.
     
    tmalt likes this.
  29. stevepat

    stevepat Devotee (494) Mar 12, 2013 California
    Trader

    Why can't we just let beer be beer and let people who like it drink it and people who don't not? It's not some zero sum game where unless all drinkers are beer drinkers beer loses.
    This is what drives me craziest about these articles.
    I love beer, i don't always want to drink beer when I want to drink alcohol, that's not some betrayal of my tribe that might 'kill' beer
     
  30. JackHorzempa

    JackHorzempa Poo-Bah (3,854) Dec 15, 2005 Pennsylvania
    Society

    :confused:

    I quoted the article in the OP:

    "Oregon-based Deschutes, the 10th largest craft brewer in the US, also eliminated 10 percent of its total staff last December."

    Cheers!
     
  31. MostlyNorwegian

    MostlyNorwegian Zealot (524) Feb 5, 2013 Illinois

    Looks at the local landscape of breweries that have opened in the time since Deschutes started to distribute to our fair burg back in 2013. See's no less than 50 reasons why local consumers are no longer buying Deschutes product.
    No particular age group is killing anything within this limited purview. It's the growth of the industry itself at the local market level which is laying waste to larger, and older and less nimble regional powerhouses who were trying to replicate the goals of the even larger, and older and even less nimble biggies by growing their way out of a problem, but in the end merely ended up being a wide and shallow stream.
     
    chrismattlin likes this.
  32. ManBearPat

    ManBearPat Devotee (438) Dec 2, 2014 Colorado

    Literally just depends on what definition you choose to apply. I also don’t identify as one, so there’s that :stuck_out_tongue:
     
  33. TrojanRB

    TrojanRB Meyvn (1,263) Jul 27, 2013 California
    Society Trader

    I always thought millennials were born in the 90’s.

    I didn’t realize that some definitions go back to late 70’s or early 80’s.
     
    tzieser, Shanex and ManBearPat like this.
  34. nc41

    nc41 Poo-Bah (1,706) Sep 25, 2008 North Carolina
    Trader

    Like most things I’m guessing it’s cyclical, most things retail are, what’s old is new what’s new is old. Clothes, cars, food, beer, spirits. Bourbon in chic again, the push is to higher end single barrel smaller batches. I find the need to label things interesting, but if beers sales overall are dropping you certinly cannot tell by the number of breweries popping up and the on site business tends to be very good. At least in the ones I’ve been too, they’re usually crowded as hell from Fri thru Sunday.
     
  35. islay

    islay Aspirant (237) Jan 6, 2008 Minnesota

    That's a very millenial attitude.
     
    tmalt, rolltide8425, KBlodorn and 8 others like this.
  36. AZBeerDude72

    AZBeerDude72 Meyvn (1,484) Jun 10, 2016 Arizona
    Society Trader

    I guess in my mind I was thinking more small local craft when I was thinking it was not talking about craft. I see it as the consumer likes the trendy stuff. People want what is popular, new, etc. Not sure around country but my local guys are out the door with people so for AZ it seems like local craft is just as popular as it ever was.
     
  37. StoutElk_92

    StoutElk_92 Poo-Bah (2,123) Oct 30, 2015 Massachusetts

    The difference is today people have better access to everything, and alcohol has probably gotten better over the years providing people with more and better options now. We also have alcoholic seltzer and still water, alcoholic juice and teas, colorful wine coolers and all sorts of things branded to a younger crowd and more people in general with advertising that craft beer might not have got to the level of yet. With all the cool sounding stuff out there I can see beer not sounding very interesting if you’re not into it and don’t know much about craft beer these days. Plus, it contains gluten, something a younger crowd seems more wary of and ready to shun.

    You seem to not take into account that different regions have different costs of living, rent and lease prices, and that distributing beer takes a chunk out of the breweries’ pocket. If a beer is distributed than it will more then likely be more expensive than if not distributed, and if a brewer is in a city or state with a higher cost of living and rent then they will most likely have to pay more for their employee staff, more for rent, maybe more for local ingredients and whatever else that comes from the area. Every brewery’s situation is different depending on where they are, what building they leased, how much their staff has to get paid to make a living in the area, whether they want to distribute to reach more people at the expense of profits, and the fact that if a brewery is new then they are probably in debt in investments and will try to do what they can to make the money back over time, which might mean more expensive product for a while that the big brands can afford to lower prices of, and even distribute further giving them an advantage, so long as people in the distribution area like it and it can stay fresh through distribution for certain styles. Expect to pay higher prices at your local and not the same price as Deschutes or New Glarus. A new start up brewery selling $10 6pks is rare.
     
    #37 StoutElk_92, Mar 3, 2019
    Last edited: Mar 3, 2019
  38. MNAle

    MNAle Meyvn (1,110) Sep 6, 2011 Minnesota

    :grin::grin:
     
    ManBearPat likes this.
  39. HouseofWortship

    HouseofWortship Zealot (565) May 3, 2016 Illinois
    Trader

    Where are Millenials doing most of their drinking? Out at bars, home at social gatherings, at home with their computer, etc.? The neighborhood brewery has done a lot to make beer more accessible to people- they can sample multiple styles to find one that fits them. Unless we see neighborhood wineries (not seeing these anywhere near me) and distilleries (which I am seeing tons of), I would imagine beer has a better shot in the long game by virtue of being more accessible and ingraining themselves in their communities.
     
    TrojanRB, RedhawkPoke and nc41 like this.
  40. nc41

    nc41 Poo-Bah (1,706) Sep 25, 2008 North Carolina
    Trader

    I agree, new breweries are popping up everywhere, you can sample on site and bring some home with you too. You know what your buying for the most part. I can sit in my local Lowe’s Foods and drink craft beer on tap that rotate from all over, I can also buy Growlers in many sizes. It reduces the need a to grab and run for 6 or 12 packs of Bud, Heineken or whatever. The trend is down, they’ll never go away, but they might have to figure out a way to compete with this segment of the market. They also serve wine on site too, or you can pull a bottle of whatever off the shelf to drink it. I do think beer retailers are feeling the pinch too from this new wave,