Breaking News
0

Will Teetotal Millennials Spell Doomsday For Beer Bigwigs?

By Zacks Investment ResearchStock MarketsJun 21, 2019 08:49AM ET
www.investing.com/analysis/will-teetotal-millennials-spell-doomsday-for-beer-bigwigs-200433605
Will Teetotal Millennials Spell Doomsday For Beer Bigwigs?
By Zacks Investment Research   |  Jun 21, 2019 08:49AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Millennials are known to be a health-conscious generation, spending less on alcohol and more on fitness. As a matter of fact, analysts estimate that millennials spend 1% or less of their total income on alcohol.

Also, when it comes to consuming alcohol, millennials prefer drinking wines, clean spirits and wellness beer. Studies have shown that these are not only sugar-free, but also keto and paleo-friendly. This has given rise to a new group of individuals who are considering giving up alcohol altogether and find being sober a hip choice.

Analysts believe that such developments have led to a crisis of sorts in the beer industry. Furthermore, craft brewers have cropped up in large numbers across America and eaten into the conventional brewers’ pie. Quite literally, life isn’t all beer and skittles for the space. But does that mean the game is over for major beer players? Let’s find out.

Millennials Believe Body is One’s Temple

Market research firm Nielsen estimates that more than half of America’s adult population, with approximately two-thirds in the 21-34 age group, have openly confessed to quitting drinking in order to live a healthy life. They care for their heart and take cholesterol problems seriously. In fact, low or no-alcohol beverages have been selling like hot cakes in 2019 and are the next big thing in the market.

A majority of young adults in the United States prefer healthier options when it comes to drinking. Natural wines or raw wines are a top choice for social drinkers because they undergo a lower degree of processing and are largely chemical free. Consequently, it does not load one’s system with toxins and cause a hangover.

How Have Major Beer Players Adapted to Changing Preferences?

Major players in the beer industry have upped the ante to adapt to the needs of the largest cohort of consumers —the millennials. Market research firm, IWSR estimates that the U.S. market for ready-to-drink, low- or no-alcohol beverages is poised to grow to 39% by 2022.

Taking a cue from such developments, beer-giant Anheuser-Busch InBev (NYSE:BUD) had announced a new position within its corporate ranks— that of chief non-alcoholic beverages officer — in June 2018. The company also announced the launch of two new non-alcoholic beer brands across the globe.

Anheuser-Busch’s non-alcoholic beer O’Doul’s has been a major hit among teetotallers. The company has also announced a non-alcoholic beer campaign in New York, Chicago and Los Angeles to raise awareness regarding alcohol free drinking at social gatherings.

Meanwhile, Molson Coors Brewing Company (NYSE:TAP) announced the purchase of kombucha maker Clearly Kombucha on Jun 6, 2019. The company plans to further venture into such territory by providing a non-alcoholic, cannabis-infused drink in a joint venture with Canadian cannabis brand Hexo. Constellation Brands (NYSE:STZ) is also rumoured to be investing in non-alcoholic, cannabis-infused drinks.

Furthermore, Diageo (NYSE:DEO) has also acquired a minority stake in non-alcoholic spirit company Seedlip.

Anheuser-Busch, Diageo, Molson Coors and Constellation Brands have year-to-date returns of 35.4%, 23.7%, 6.2% and 13.4%, respectively. Anheuser-Busch, Diageo and Molson Coors carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

To Conclude

While traditional beer makers have been facing difficulties in the recent past, all’s not bleak and hopeless. Studies have shown that even though millennials tend to move toward sobriety, they still consume a lot of alcohol. The largest generational cohort among the modern consumers, the 1990s born, drink considerably at social events, albeit carefully.

Nielsen also estimates that millennials constitute about 35% of the total beer guzzlers in the country, which is a good sign from the producers’ point of view. Meanwhile, these customers are consistently looking to try out newer craft brands as well. Major alcohol players have also started taking advantage of the new beverages trend of 2019. As long as they can improvize to suit the need of the hour, beer majors have nothing to worry about.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>



Diageo plc (DEO): Free Stock Analysis Report

Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report

Constellation Brands Inc (STZ): Free Stock Analysis Report

Molson Coors Brewing Company (TAP): Free Stock Analysis Report

Original post

Zacks Investment Research
Will Teetotal Millennials Spell Doomsday For Beer Bigwigs?
 
Will Teetotal Millennials Spell Doomsday For Beer Bigwigs?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email