The alcoholic beverage market in the US had been growing slowly but steadily in the past, with beer sales traditionally leading, followed by wine and spirits. However, as millennials reach the legal drinking age, these trends are shifting. Beer sales are slowing down and alcohol consumption is falling, but overall sales revenues are still growing, as millennial drinkers prefer higher value products.
According to research by Nielsen, millennials consume less alcohol compared to baby boomers, and they consume it differently. They are more selective and willing to try new things, posing a challenge to alcohol marketers who try to influence their drinking choices.
Staying on Top of Consumer Trends
Cristin Singer, expert in the food and beverage industry, states that understanding millennial preferences, leveraging new packaging methods and employing key mobile visual technologies will be indispensable to stay competitive in the 2018.
This year, consumers will continue to look for products online before they buy them, so companies will need to harness digital and social platforms in order to connect with them. Detailed product descriptions, recommendations, tips and recipes, stories, and forums will be necessary to quench the thirst for information.
Apps that accompany products are set to be successful amongst a generation that spends more than 5 hours a day on their smartphones. In fact, research conducted by Acosta found that 8 out of 10 millennials are interested in scanning products in-store and then paying via a mobile app (snaptoshop).
Good review systems will foster word-of-mouth marketing and will be perceived as trustworthy. Plus, the alcohol market has strict ASA regulations. Therefore, it seems logical to channel the marketing efforts through an app that can only be accessed by users of legal age.
Scan, discover, buy, review
Beverage retailers are starting to embrace a new wave of digital options, such as visual search, that connect products with consumers and digital content. They adopt new models such as alcohol-delivery services and e-commerce, and develop apps that speak to the tech-savvy millennial drinker.
Uvinum is a great example of a functional product scanner app that uses visual search powered by image recognition. With this technology, users can discover and buy wine and other alcoholic beverages.
Users can download the app or use the mobile site version to access a large catalog of wine, beer, spirits and gourmet products and accessories.
They can search their desired product by scanning any label using the camera function. Then, users are taken straight to the product page of the item. Here, they can access information about it, as well as see reviews and recommendations – whether they are in a supermarket, a bar or at home.
The app also lets you find other people with similar interests and learn about their personal favorites, suggestions, or tips as to how to consume wine the right way.
Millennial Alcohol Consumption and the Quest for Authenticity
There are a few things to take into consideration when addressing millennial drinkers:
- They value quality and variety over price and they are willing to pay more for a handcrafted beer from a specialty shop than any other consumer.
- They like to experiment with taste and try new flavours, as they search for ‘authenticity’ in their drinks.
- They don’t drink alone. Their alcohol choice is a social currency for them, so even if they are not accompanied, they will share their experiences with their friends – word of mouth is everything. They listen to what others have to say and check online reviews.
The millennial generation is not impressed by mainstream US lager brand marketing, yet they are the ideal target for smaller craft beer companies. Thanks to them, the ‘craft movement’ now controls 12% of the beer industry and expects to reach sales worth $45 billion by 2019.
Millennials are also big wine lovers. In 2015, they accounted for 42% of all wines consumed in the US, which translates to almost 160 million cases. They are on a quest to experiment with taste and try new things. This has also led to a rise in spirit sales which goes hand in hand with the renaissance of the cocktail scene.
Their interest in variety and quality goes beyond the flavor when they are looking for something new to buy. 1 out of every 3 millennials say a brand’s tradition and history influences their drink of choice. They want to know more about the origin stories of what they drink, such as the brand heritage, production techniques, ingredients, and so on.
These stories can be told through the style and aesthetics of the label. Also, the packaging or the place they buy it from can influence. In any case, interactive, smart labels that bridge the online-offline gap carry an added competitive advantage.
Influencing Millennial Drinkers
Millennials are trendsetters amongst their friends and they are attracted to new drinks, new food and technology.
They reject traditional mass marketing techniques and alcohol brands that are not consistent with the image they want to portray. Thus, marketers must be clever and resourceful if they want to engage with them.
Alcohol brands and retailers must center their efforts to reaching these young drinkers. They also need to do thorough research in those ‘I want to know moments’, be transparent, and interact with drinkers in novel ways that will lead them to spread the word.