Beer sales are falling and Millennials and Gen Z, who are increasingly choosing wine and spirits are to blame. And Big Beer is looking for alternatives to ensure profits.
Here’s the deal…
According to the Beer Institute, consumers picked beer less than half of the time when deciding on an alcoholic beverage in 2017. Beer was the choice of only 49.7% of drinkers, quite a drop from 60.8% heights of the mid-1990s. And America’s most iconic beer brands are feeling the pain.
Just last week a flurry of Big Beer Q2 announcements came out and the majority of them reported declines in the US with huge flagships being hit especially hard.
According to the Business Insider a number of once unassailable brands showed concerning Q2 declines…
On Monday Heineken announced that its US sales had declined to the high-single digits for the first half of the year…
Last Wednesday Molson Coors reported its sales decreased for the fourth straight quarter, with Coors Light’s decline contributing to the slump. And they also took that opportunity to announce that they’d entered into a joint venture with HEXO, (a recreational cannabis subsidiary to Canada’s The Hydropothecary) to form a standalone company to develop new non-alcoholic, cannabis-infused drinks north of the border.
And AB InBev reported last week that US revenues had dropped 3.1% in the second quarter, with two US icons, Budweiser and Bud Light, continuing to lose market share. And at that time the company also announced that they’d created a new executive position dedicated to the nonalcoholic beverages a segment that already makes up !0% of the company’s sales by volume.
On top of Constellation Brands big announcement last October that it had taken a 9.9% stake in Canadian marijuana producer Canopy Growth, it’s becoming increasingly clear that Big Beer companies are now looking beyond beer to cannabis-infused drinks and nonalcoholic options to appeal to Millennials and Generation Z who are abandoning beer, and to shore up their bottom lines.
Pot Beer Image Credit: Mitchell Maglio