Tuesday, November 27, 2007

As Reported by Wine & Spirits Daily

Wine & Spirits Daily NewsletterNovember 26, 2007~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

A CRASH COURSE IN HOW MILLENNIALS DRINK. A new study from the Nielsen Company confirms important themes in Millennial drinking, including the generation's willingness to experiment with new products and pay a premium for alcohol. It's all about the image, right?

Also known as "The Next Great Generation," which is news to us, the 70 million Millennials outnumber Generation Xers (31 - 44 years old) by nearly 25 million and are nearly as large as the approximately 77 million Baby Boomers (45 - 65 years old) in the U.S.

"At the beginning of their careers, Millennials are discovering the world and have control over their money and time in ways their predecessors never did," said Richard Hurst, senior vp of Beverage Alcohol at ACNielsen.

BEER REIGNS SUPREME. Surprisingly, Millennials still show a preference for beer despite a drop of 12 percentage points in the past ten years from 59% in 1997 to 47% in 2007. Wine and spirits, meanwhile, have gained only six percentage points during the last ten years. On a dollar basis, beer represents the majority (47%) of Millennial consumers' spending, compared to spirits (27%) and wine (26%). On a volume basis, beer accounts for 83% of Millennials' purchases, compared to 11% for wine and 6% for spirits.

When it comes to beer, Millennials are much more inclined than older consumers to purchase imported beers (particularly Mexican) or craft beers, hence the recent surge in both categories.

HIGH SPIRITS ON THE TOWN. As with beer, Millennials are more than willing to trade up to more expensive spirit brands. Premium and ultra-premium spirits rank highest among Millennials, while value-priced spirits dominate consumers over the age of 50. This might have something to do with the fact that Millennials are more inclined to consume spirits drinks with friends, in a bar or nightclub than Gen Xers and Baby Boomers.

"As a group, Millennials grew up with more beverage options -- premium coffees, flavored waters, sweetened drink options -- than their older counterparts," said Hurst.

Nielsen found that Millennials perceive spirits to be "fun," "modern" and "popular." Baby Boomers, on the other hand, are less likely to consider spirits "fun" and more likely to perceive spirits as "relaxing" and "suiting their lifestyle."

RED WINE RULES. In line with recent trends, Millennials tend to prefer red wine (51% of volume). Popular varietals include cabernet and pinot noir, while chardonnay remains the most popular white wine across all ages. Pinot grigio, sauvignon blanc and rieslings account for a higher share of Millennials' wine purchases compared to the over 30 population.

Are you starting to see a recurring theme? Millennials like to experiment. They are much more likely to try new flavors, varietals brands and drinks recipes than older generations.

Says Gary Glass, president of White Rocket Wine Company (Millennial division of Kendall-Jacson): "The Millennial focus is not on learning about wine to avoid 'making mistakes' but on having fun with wine. Quality certainly needs to be in the bottle, but to sell that first bottle, the brand name and packaging are critical as this is the key driver of Millennials' wine shopping decisions."

USA TODAY'S VIEW ON LOWERING THE DRINKING AGE. Should the drinking age be lowered? Apparently not, according to an editorial in Monday's
USA Today. The author argues that while lower drinking age advocates - who generally agree 18 should be the legal age - have good points, the social consequences outweigh the positives.

"The pro-18 argument goes like this: If 18-year-olds are allowed to vote and serve in the military, they ought to be able to drink. The age 21 minimum simply undermines respect for the law and prevents young people from learning to drink responsibly at home before they get to college," says the article.

Contrarily, the author claims that "about 50 major studies point to the same conclusion: On average, traffic deaths drop by 16% when the drinking age goes from 18 to 21. Since 1984, about 25,000 lives have been saved, federal highway authorities estimate."

To read more about the pro-18 vs. the pro-21 argument, click here. Both sides have some interesting points.

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