Millennial consumers (21-30-year-olds) and their thirst for new experiences have a clear impact on their alcoholic beverage choices – they frequently seek new tastes and are willing to pay a premium – according to a new study by The Nielsen Company.
Also known as “The Next Great Generation,” the 70 million Millennials outnumber Generation Xers (31-44-years-old) by nearly 25 million and are nearly as large as the approximately 77 million Baby Boomers (45-65-years-ld) in the US.
Alcoholic beverage preferences for the 21-30-year-old age group are clearly changing, Nielsen said: Ten years ago, beer accounted for 59% of this group’s alcoholic beverage spending; that number has shrunk 12 percentage points to 47% as wine and spirits purchases have grown in relatively equal proportions.
While the 31+ age group preferences are changing in a similarly, their wine and spirits preferences are moving at a much slower rate with only a six percentage point gain during the last 10 years.
Other, selected findings from the comprehensive study, below.
Beer Still the Favorite
Despite beer’s recent decline, Millennials still show a preference for it:
- On a dollar basis, beer represents the majority (47%) of Millennial consumers’ spending, compared with spirits (27%) and wine (26%).
- On a volume basis, beer accounts for 83% of Millennials’ purchases, compared with 11% for wine and 6% for spirits.
- Among Millennials who drink different types of alcoholic beverages, beer is most often cited at their “favorite.”
Millennials are exhibiting beer-drinking preferences that differ from older generations’ and are much more likely to experiment with different beer types and flavors:
- Though domestic premium beers are still their dominant choice, Millennials are much more inclined than older consumers to purchase imported beers (28% of Millennial beer spending versus 15% for other age groups) or craft beers (15% of Millennial beer spending versus 6% for other age groups).
- Mexican beers account for nearly one half (46%) of Millennials’ import purchases compared with approximately one-third (35%) of older consumers’ import purchases.
- Older consumers show greater interest in imports from Holland, Germany and Canada than Millennials do.
Socializing with Spirits
As with beer, Millennials show a preference for premium over value when it comes to spirits, and are more likely to assign a social role to spirits:
- Premium and ultra-premium spirits rank highest among Millennials, while value-priced spirits dominate consumers over age 50.
- For example, Millennials satisfy nearly half of their vodka purchases with premium and ultra-premium priced brands, compared with less than one-third of total vodka sales for consumers over age 30, and 20% of consumers 61 years and older.
- Compared with Gen Xers and Baby Boomers, Millennials are more inclined to consume spirits with their friends, in a bar or nightclub, and are the most enthusiastic age group in learning about spirits.
- Millennials perceive spirits to be “fun,” “modern” and “popular”; Baby Boomers are less likely to consider spirits “fun” and more likely to perceive spirits as “relaxing” and “suiting their lifestyle.”
Red Wine Preferred
- Millennials tend to prefer red wines (51% of volume) more so than older consumers (approximately 44%).
- Among red wines, Cabernet and Pinot Noir have the most distinct skew toward Millennials; Chardonnay remains the most popular white wine across all ages.
- Pinot Grigio, Sauvignon Blanc and Rieslings account for a higher share of Millennials’ wine purchases compared with the over-30 population.
- Similar to the beer category, Millennials are more open to trying imported varieties and also contribute more to sake sales than Gen Xers and Baby Boomers.
- Nielsen’s research shows that while Millennials perceive wine to be “relaxing” and “sophisticated,” they associate a certain formality with wine, citing it most often as the beverage of choice during a “formal” night out, and less often for casual occasions.
- While most Millennials consider themselves as novices or only slightly knowledgeable about wine, approximately one-third (34%) are interested in learning more.
“The Millennials are primed to be an extremely influential group,” said Richard Hurst, SVP of Beverage Alcohol at ACNielsen, a service of The Nielsen Company. “At the beginning of their careers, Millennials are discovering the world and have control over their money and time in ways their predecessors never did…. [U]nderstanding what they’re buying, why they’re buying, where they’re buying and how they’re buying represents an enormous opportunity for today’s manufacturers and retailers.”
About the study: Information for Nielsen’s Millennials and Beverage Alcohol Study was collected via a triangulation of Nielsen’s Homescan consumer panel information and online survey and fieldwork from a sample of nearly 900 consumers 21 years old and older who drink beer, wine and spirits at least once every two months..