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Sunday, May 31, 2015

When Millennials Get Fat

Millennials. We know who they are. They're the generation of Americans that came of age after 2000. It's an expanding demographic at the moment because a generation is roughly 20 years. So we will not see the last of the Millennials for another five years.

There are a few things we know about this generation. We know, for example, that Millennials are likely to be saddled with significant debt...from education or consuming. We know they're less likely to own or drive a car than previous generations. Also less likely to own a home.

In food and beverage terms, we know Millennials have all but abandoned mainstream macro beer in favor of craft beer, wine and spirits. When you look at the industry data and you see the beating macro brands are taking and the growth craft brands are seeing, a lot of that is being driven by Millennial preferences.

Which conjures up this question: What happens when Millennials get fat? It has to happen and it is happening. Metabolisms can only keep you thin for so long, particularly when you're partial to high calorie food (this generation loves fat) and drinks. Please recall that your typical craft beer has significantly more calories than macro beer.

At some point in time, it's likely Millennials are going to start looking around for lighter options. Some, probably those on the high side of the demographic in age, are almost certainly looking around for those options already.

It won't be the first time this has happened. One of the reasons light beer and lo-cal foods first became popular back in the 1970s is that Americans became diet and weight conscious. The population wasn't nearly as fat as it is today, but a lot of people wanted healthier options. Light beer was one part of that and it dominated the industry well after craft beer arrived in the 1980s.

When I think about the beer industry, I can easily see Millennials eventually moving away from big beers. That's hard to imagine given the current popularity of double IPAs, barrel-aged beers, etc., but I suspect Millennials will someday accept the idea that lower ABV beers are or can be okay.

In fact, despite the effort that big beer has put into targeting the young crowd via craft brewery buyouts and shoddy, high alcohol products, the big guys are counting on Millennials getting fat and drifting back to macro beers. That may not happen quite the way they think, but it's possible that some part of the Millennial crowd will relent and start drinking light beer.

The more likely scenario is that lower ABV beers made by craft brewers will capture a larger share of the market than they hold today. There are some great lagers and light ales on the market and more are on the way. Brewers who manage to produce beers that are light in ABV, yet full in body and flavor, will probably have the greatest success in this area.

We'll have to wait and see how this plays out. The only thing we know for sure is that Millennials will get fat. Unless they decide that fat is okay, their consumption habits will change...and so will the beer industry.

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