Millennials and Gen-Z are driving Adult Beverage Sales

Millennials and Gen-Z are driving Adult Beverage Sales

            We’re hospitality people and as our passion for food and all things culinary is highly focused so too is it equally attracted to the adult beverages so many of our clients rely upon for revenues.  We understand the need to anticipate our clients and their guests’ needs so we look beyond the food and drink menus to better understand what’s driving the consumer purchasing trends, guess what, its demographics!  It’s not enough to be a great cook or mix the classic cocktail, in today’s hospitality mix operators must maintain diligence toward a better understanding or who is moving the marketplace forward, so we’re going to offer a helping hand.

            When discussing demographics that drive the market we prefer to rely upon solid information just as another business would so to begin the conversation we’ll point out an article in the vanguard of consumer market changes (Millennials surpass Boomers, Washington Post 4/24/16). GenZ is on the heels of Millennials (combined they number 75 – 100 million) and while they possess some different characteristics as a total they are aligned closely enough for the purpose of our discussion here. These groups grew up with cell phones, and later smartphones, they enjoy sharing their activities online and especially like to learn the “story” behind a product through their own process of discovery and if they feel so inclined post it to share with their friends.  All retailers, including hospitality, should be aware this consumer cohort is not “brand loyal” as their GenX or Baby Boomer parents may have been and seek out alternative offerings, socially-conscious products and especially value! 

            The drinking habits of this group are equally interesting as we’ve personally observed first-hand. If there’s a group of four seated at a high-top nearby and they’re all drinking wine in most cases it won’t be from the same bottle but by the glass and possibly with four different pours.  Not to say they don’t enjoy their craft beers, after all, they have been equally responsible for the trend toward “drinking better” but drinking less as drops in alcohol consumption across the U.S. have confounded many an adult beverage manufacturer and retailer alike.  IWSR reports that only wine has inched upward in sales and volume at the expense of both beer and spirits (US Beverage Alcohol Sales Slip, CNBC 6/1/17) and across all alcohol categories consumers appear to be open to paying a little more for a quality pour.  

            The purchasing behaviors among our study group are consistent across retail and food service categories, potentially open to paying for a brand name; however, always seeking a value along the way.  As one article (Next Gen Shall be Served, Beverage Media 1/3/17) pointed out they may purchase a Joel Gott Red at $15 - $20 per bottle but before leaving the store will drop a bag-in-box, or two, of a varietal wine such as a Pinot Noir or Sauvignon Blanc at a substantially lower price point.  These folks have some equally interesting approaches to brand name beverages when they’re dining out. They will often begin with a Grey Goose, Bacardi or Patron beverage at $7 - $9.50 and morph toward a well spirit for succeeding rounds at a price point in the range of $4.50 - $5, again reinforcing the better drinking behavior followed by the seeking value protocol of their demographic group. Nielsen reports (Consumers turn to private label wines, Beverage Daily 1/22/18) consumers have no issue picking up a private label wine especially if they trust the store operator offering it.  This behavior of private label acceptance naturally rolls over into the dining and drinking venues when guests opt for a “glass of your house Chardonnay” when queried for a drink order. 

            So how does this relate to the hospitality operator in developing beverage revenue management practices?  The evidence suggests young consumers, of legal drinking age, will turn to a private label wine or well spirit under the right conditions.  Retail shopping could be relied upon as an indicator of purchasing behavior in the hospitality segment.  The net result is attentive operators may “get ahead of the curve” when demographic changes within the market drive sales in a direction including new territory.  Among all the challenges of running a food service establishment operators don’t have time to follow forces changing the marketplace, but WE do, contact us to start a conversation at www.themenuspring.com.