A new report from Goldman Sachs forecasting a weak outlook for the American beer market is making waves across the drinks industry. Released earlier this week, the report cites changing Millennial tastes—which are shifting away from beer in favor of wine and spirits—as a key factor behind beer’s slowdown, which has been ongoing but seems to be accelerating this year.
Goldman has downgraded its expectations for the beer market over the next two years, anticipating volume declines. The softness is largely being driven by mainstream domestic brands such as Budweiser, Miller Lite and Coors Light. And growth in the craft-brewing segment, which has been the darling of the beer industry the past several years, has decelerated significantly.
Beer’s shrinking sales come as wine and spirits continue to steal share within the drinks industry. According to Impact Databank, a sister publication of Wine Spectator, the U.S. wine market is slated to expand 1.1 percent to 330 million cases this year, while spirits are set to rise 2.5 percent to 228 million cases. Wine’s growth is being driven by California wines retailing above the $10 mark, as well as the burgeoning sparkling wine segment, which is expected to rise 8 percent to a new record of 22 million cases this year.
These trends are being driven primarily by consumers under 34 years old—who are drinking less than prior generations did at their age—as well as the 35- to 44-year-old segment, which is often opting to consume wine or spirits over beer, according to the Goldman report.
For more details on what this means for consumers and an in-depth analysis of the report, visit Shanken News Daily.