Why Millennials are Drinking Less and It's Not Only Because of Dry January

In 2018, it was revealed in multiple studies that millennials are drinking less wine than the baby boomer generation, meaning that wine sales are expected to decrease come 2019.

With the Dry January Movement becoming popular, where participants abstain from drinking alcohol for the 31 days of the month, millions of millennials aren't drinking libations at all.

But it appears as though millennials drinking in moderation is also part of a much larger trend and restaurants and bars are going to have to get more creative with beverage options this year.

"There are signs that a more sweeping and permanent moderation movement is taking root among millennials. The generational shift is forcing bars, restaurants and alcohol brands to adapt," writes "Ad Age." "More low- and no-alcohol products are in development, and some, like Heineken's new no-alcohol 0.0 beer, are already hitting store shelves. Drinking establishments, meanwhile, are adding fancier non-alcoholic cocktails, or mocktails, to their menus as they look to keep their drink revenues flowing."

But it isn't just millennials drinking less. New of-age drinkers aren't drinking nearly as much as the generations before.

"Entry-level drinkers are drinking less," says Benj Steinman, "Beer Marketer's" publisher "It's a real 'watch-out' for the future."

This is partly because younger generations are living a healthier lifestyle and are more educated on nutrition.

"Older generations were ignorant, young drinkers today are not," says Kit Yarrow, a consumer psychologist to "Ad Age." "This more educated and informed generation knows the perils of drinking and driving; the health issues associated with alcohol; and the calories associated with drinking."

Read more about how younger generations are drinking less at “Ad Age.”

While consumers may be gravitating away from alcohol, they are instead interested in natural remedies like cannabis.

We are already seeing several beverage giants jump on the cannabis bandwagon. CBD, the cannabis compound that is legal in all of the U.S., is now being served at restaurants and bars in most major cities.

With that in mind, artisan CBD infusions in particular have become popular. Listen to this recent episode of The Barron Report below where Host Paul Barron discusses the CBD trend with the executives of Azuca, a company that is thriving with its chef-quality CBD infusions.

Direct-to-Consumer Wine Sales See a Spike

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Although we recently reported that millennials are drinking less wine than the baby boomer generation, direct-to-consumer (DtC) wine sales have increased by 12 percent in 2018.

According to the 2019 Direct to Consumer Wine Shipping Report by Sovos and Wines Vines Analytics, consumers are also willing to buy more expensive wines directly. The average shipped wine bottle price spiked by 2.4 percent.

So why the rise in these sales? Well, thanks to e-commerce giants, buyers now expect direct shipping on most products. So why not from their favorite winery too?

“The direct-shipping channel has matured into a mainstream option for wineries to meet growing consumer demand,” said Larry Cormier, general manager of ShipCompliant by Sovos, in a press release. “As buyers continue to prefer direct shipping of all the products they buy, this channel must rely on organic growth, not new states opening for shipments. As a result, we anticipate strong but slower growth in the years to come.”

Most of today's wine sales are on-premise, but of the $30 billion in sales made from off-premise wine sales, DtC accounted for 10 percent.

Back in 2012, DtC wine sales were $1.5 billion. Fast forward to today and the sales have more than doubled.

Napa County wineries are shipping the most wine in the country with 45 percent of shipments coming from this region. The average price of wine from this region spiked by 7.1 percent last year, which means wine prices are expected to decrease come 2019, especially as the market becomes more saturated with more affordable wine options.

“This may be an early indicator of what’s to come for the whole channel in 2019, as price increases have historically been followed by flat or declining prices the following year,” said Klingensmith, publisher and president at Wines Vines Analytics.

Learn more about the 2018 DtC wine trends at "Wine Business" now.

Want to know what 2019 will bring when it comes to wine? Listen to this recent episode of The Barron Report below where Host Paul Barron talks with Emily Wines, master sommelier & vice president of wine and beverage experiences at Cooper’s Hawk Winery & Restaurants about the new era of wine drinkers.

Cooper’s Hawk Partners with the SAG Awards To Increase Brand Awareness

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On this episode of The Barron Report, Paul Barron speaks with Emily Wines, master sommelier & vice president of wine and beverage experiences at Cooper’s Hawk Winery & Restaurants. In this Skype interview, the two discuss the latest feat for the winery, partnering with the Screen Actors Guild Awards®, and how to utilize partnerships to increase brand awareness.

In November, Cooper’s Hawk announced that they are the Official Wine of the Screen Actors Guild Awards® 25th Annual SAG Awards. To salute the silver anniversary, the winery has created a special wine named the “Artist’s Red Blend.” The wine is a limited-edition, with a commemorative label, and will be served during the Awards ceremony on Sunday, Jan. 27, 2019. Furthering this special partnership, Cooper’s Hawk will be hosting an exclusive event for it’s Wine Club Members.

When discussing methods of how to increase a wine brand’s awareness, Wines details how previous partnerships with celebrity chefs, like Tyler Florence, and other wineries for Cooper’s Hawk have proven to be successful.

Watch this video above for more marketing tips like virtual wine tastings, and how to educate your clients.


SHOW NOTES

  • 7:33 - Wine Marketing Tips for 2019

  • 9:52 - Wine List Tips

  • 12:41 - Virtual Wine Tastings

  • 14:31 - What’s New for Cooper’s Hawk


  • 0:11 - Cooper’s Hawk Partners with SAG Awards

  • 2:32 - Artist’s Red Blend and How Brands Align

  • 6:03 - Breaking Down the Blend

 
 

Produced by:

Rachel Brill

Rachel Brill

Social Producer


VIEW BIO

The Wine Industry to Face Challenges in 2019

Wines

Although today's wine drinkers, especially millennials, are more adventurous, they aren't drinking nearly as much wine as baby boomers.

This presents a future challenge for the wine industry because it’s no secret that the millennial generation has and will continue to have the greatest buying power in the market. There are more millennials working and earning a living than any other age group. With that in mind, brands are all fighting to appeal to this segment of the population.

According to Lulie Halsted, CEO of London-based market-research firm Wine Intelligence, millennials are drinking less wine than the previous reigning population segment.

“We’re proportionally losing some wine drinkers,” said Halsted at 28th Sonoma County Winegrowers Dollars & Sense Seminar and trade show last week.

The population that drinks the most wine is aging. 21 percent of the wine drinkers in America are over 65 years old. This is quite a spike from the 16 percent of wine drinkers being in this age bracket in 2015.

Three years ago, there were 7.5 million wine drinkers between the ages of 21-24. Fast forward to 2018, there were one million fewer wine drinkers in this age group.

“It feels like from the information and insight we have that we have kind of reached a sort of plateau and a peak in terms of growth in the number of drinkers we have in the marketplace,” said Halsted.

But this isn't just the trend in the U.S. either. In the U.K. and Australia, there fewer and fewer wine drinkers as the baby boomers grow older.

So what are millennials gravitating too instead?

Well, today's market offers a range of alcoholic beverages including craft cocktails, craft beer, and even boozy milkshakes. These alternatives could be tempting millennials away from wine.

“It feels to them like there is more choice available, and maybe wine isn’t quite up there in their consideration set,” said Halsted.

Read more about how millennials aren't drinking as much wine as their parents did at the "North Bay Business Journal" now.

It's more important than ever to have a wine list at your restaurant that is compelling to pique millennials' interest.

On this recent episode of The Barron Report, we took a closer look at some of the top wines on the "Wine Spectator's" annual list with the Wine, Sake and Cocktail Journalist and Consultant Shana Clark. Watch the video below to learn more about these beverages and why they made the coveted list from this wine expert.

Why Whiskey Distillers are Ramping up the Production of Bottled-in-Bond Spirits

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The craft movement encompasses so much more than beer, consumers are also gravitating to craft spirits.

This has fueled a spike in the production of bottle-in-bond spirits. The term bottle-in-bond means that the American-made distilled beverage has been aged, bottled, and deemed authentic liquor by the federal government, according to standards outlined in the Bottled-in-Bond Act of 1897.

“At the time, whiskey was largely sold in barrels or jugs which had questionable provenance,” said Susan Wahl, group product director for Heaven Hill, to "VinePair."

Back in the day, producers used to taint spirits with filler additives.

“In effect, it was America’s first consumer protection law, predating the Pure Food and Drug Act,” said Wahl.

These bottle-in-bond whiskeys are higher quality and higher proof. But it's an investment for the producer considering how long it has to be aged for.

"The Bottled-In-Bond Act stipulated that the whiskey must be the product of one distilling season from one distillery, aged in a federally bonded warehouse for at least four years, and bottled at 100 proof," writes "VinePair."

But its proven to be worth the wait since the sales are up for these spirits.

"Bottled-in-bond shows that a whiskey has been completely, lovingly made ‘in-house,’ which sets it apart from people who are just blending-bottling," said Scott Harris, Catoctin Creek founder and general manager.

These spirits hold their own in flavorful hand-crafted cocktails too.

With all of that in mind, spirit producers are rolling on more bottle-in-bond spirits like Jack Daniel's Bottled-in-Bond Tennessee Whiskey and Kings County Bottled-in-Bond Bourbon. All of New Riff Distilling spirits are bottled-in-bond.

Learn more about these types of spirits and the newly popular brands at " VinePair" now.

Speaking of craft spirits, looking for American-made cocktail recipes to spice up your bar menu? Check out this recent episode of the Foodable Smart Kitchen & Bar, where master mixologist, Oscar Castaneda demonstrates how to make these classic cocktails but with a twist.