In Beer vs. Wine vs. Spirits, Consider Similarities, Too

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Sure, they’ve already ruined the housing market, dating and napkins (natch), but here’s one thing Millennials aren’t apparently killing: wine.

According to the U.S. Wine Market Council, Millennials, who make up a vague demographic of birth dates that nobody can apparently agree on, now consumer 42 percent of wine sold in the U.S., accounting for roughly three glasses of alcoholic grape juice per sitting. Through some backwards math (which I excel at these days), if we pull beers per capita (75.8 liters in 2014) and round up to an even 80, Americans consume 225 12-ounce servings over a year. For social graces, let’s say those beers are consumed on Fridays and Saturdays, which means that’s still just two servings of beer per sitting.

But let’s be generous and say Millennials can’t get enough of their craft beer to the point that they’re consuming more than the average American at 3 beers per sitting, putting it on par with wine. All this does it raise an interesting question that seems to be surrounding the beer industry in regard to the “armada” of wine and spirits coming for beer’s – pardon the turn of phrase – share of throat.

Here’s the situation in 2017, according to Wine Spectator: the U.S. wine market is expected to expand 1.1 percent and spirits are set to rise 2.5, while beer is estimated to decline by .7 percent. Volumes for these three options are wildly different to be sure – beer is cheaper and more readily available in simple terms of ounces – but in broad thematic terms, sets up a worthy discussion.

If you look at trends across the three segments, there are certain connecting points of interest. For example, lower-ABV options may be applicable to wine as well as beer. Flavored brands have been at the core of growth for some spirits, just like beer. Meanwhile, higher end, premium brands have helped move product in wineliquor and beer.

It’s all circular. Especially when it comes back to Millennials. This demographic is the driving force of the American economy – the most educated age group with increasing amounts of expendable income that thrives off aspects of authenticity. As one area of alcohol goes, it’s worth paying attention to the others. Fluctuations in one corner reverberate elsewhere, given the cross-drinking proclivity of today’s consumers.

There are some changes seen in this annual poll from Gallup, but rather than looking at the situation as beer vs. wine vs. spirits, the 50,000-feet view shows that there is plenty in which these beverages share, especially in terms of taste preferences and creating experiences.

What this doesn’t mean is that Millennials are killing the beer industry. Rather, it means that beer – and beer drinkers – have new trends to look at and consider. For all the anecdotes and data we can pull from the beer industry, don’t ignore the rest.

Bryan Roth
“Don’t drink to get drunk. Drink to enjoy life.” — Jack Kerouac

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3 thoughts on “In Beer vs. Wine vs. Spirits, Consider Similarities, Too

  1. Hi Bryan—would love to understand the impact of top selling Higher ABV beers having on the volume of beer sales, since you typically don’t drink the volume of double ipa’s vs. bud light. Price point is higher and margins may be higher, but volume is probably lower.
    Also, what is the impact on the “tasting” experience when consumers have a flight of 3 oz pours, check them off their list and move on as their goal is to get as many badges as possible. Tough on the volume equation. Both are new impacts on the beer scene in the last 5-10 years.

    • Thanks for reading, Jay! In terms of volume in “high” vs. “low” ABV, suppose we’d first need to determine what that threshold is. The last averaging of craft beer ABV levels was done a couple years ago at 5.9%. I’d guess it hasn’t changed much. From there, what would “high” and “low” mean? In the IPA category, the top-3 of Lagunitas IPA (6.2%), Sierra Torpedo (7.2%) and Goose IPA (5.9%) show a range of ABV levels. Can’t compare those to BMC beers because volumes overall are way too different, but might be a fun experiment to ID potential volume of beers around that 7% ABV level…

      As for tasting experiences, always like to point people toward this anecdotal test: https://www.brewersassociation.org/articles/the-value-of-fractional-pours/

  2. Interesting article. The wine business, particularly the thriving rush of restaurants exemplifying the ethos of fine food: casual setting, seems to really be driven by young professionals. I.E. millennials who are growing up and gaining more disposable income to invest in their passionate pursuits. Craft beer, in contrast to wine, is much easier to understand, and much less expensive to explore. Hence the last decades ridiculous uptick in that category. Not really showing any signs of slowing down. But I am happy to say that in regards to wine anyway, many of my customers coming in are millennials, and they are extraordinarily open minded. They want the experience and the value of a lesser explored grape or region, not the cache, glitz or predictable flavors of so many cult expensive Cabernet, or explosive Aussie Shiraz.

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