United Kingdom: Fewer young drinkers sobers the industry

 

Drinks companies try to confront a sharp fall in number of those aged 16-24 taking alcohol

 

Source: FT

by: Scheherazade Daneshkhu and Aliya Ram

March 11, 2016

 

Some say it is about ethnicity and religion. Others say it is because tuition fees have made life’s luxuries less affordable. Still others point to the desire of today’s youth to lead healthier lifestyles.

 

Whatever the reason, drinks companies are having to confront a sharp fall in the number of young people who drink alcohol, and are wondering what they should do about it.

 

Data released this week by the Office for National Statistics showed that less than half of young people reported drinking at all in the past week, compared with 66 per cent of those aged 45-64. The number giving up drinking altogether has risen by 32 per cent on a decade ago.

 

Young people are also drinking less frequently than their parents. They are still more likely to binge drink than any other age group, but the proportion doing so has dropped by 40 per cent since 2005.

 

“I know people who don’t drink,” says Cheran Jobi, a politics student at King’s College London, “And I don’t really drink casually either. It’s either a lot or I don’t drink at all.”

 

Yousuf Uddin, a Muslim law student at the same university, says the rising number of Britons from minority ethnic backgrounds partly explains the change. Black, Asian and minority ethnic communities “are more conservative about drinking”, he says.

 

However, according to the Demos, the think-tank, young people who took part in its own survey of 16- 24-year-olds published last year cited health most frequently as the reason they drank less. Most also said alcohol was not important to their social lives.

 

But for Andrew Russell, research manager at Drinkaware, the charity, the main reason is the perennial clash of generations.

 

“Generation X” – those born between the early-1960s to the early-1980s – “was the beginning of the lad and ladette culture,” he says. “This is the generation that came after, and one of the things they are rebelling against, is rebellion.”

 

Young people are drinking less than their parents

 

Young people also smoke less than their parents did at their age, are more health-conscious and are less likely to get pregnant, as demonstrated by this week’s data on teenage pregnancies.

 

Rick Connor, director of public affairs at Pernod Ricard, producer of Absolut vodka, Jameson Irish whiskey and Beefeater gin, agrees there has been “a social change in young people’s attitudes towards alcohol”.

 

He says millennials, the post-Gen X group, spend more time on their computers getting together with friends virtually, rather than physically, “so they don’t feel the necessity, as much as they used to, to get together and drink”. For a company whose slogan is “conviviality”, this would not seem to bode well.

 

Drinks groups have coined a word to describe the change: premiumisation. They say that when people do drink, they want better quality and are prepared to pay a higher price for it – the popularity of craft beer being a case in point. Mr Russell says data from Kantar Worldpanel show the price per litre of alcohol spent by 18- 24-year-olds has increased.

 

Pernod’s Mr Connor says: “We look at the decline in drinking among younger people and the fall in antisocial behaviour as a positive. People are drinking less but better, which is a good thing.”

 

According to the government’s health and social information centre, alcohol consumption in the UK fell 26 per cent between 2002-12. The fall was steeper for beer, at 39 per cent, than it was for spirits and wine.

 

Heineken says sales of its Foster’s lager have been falling in the UK but that demand for more expensive beers such as Tiger, Sol and Amstel is increasing. It made a virtue of the trend towards more moderate drinking in its latest advertising campaign, in which a man turns down a bottle of Heineken before leaving a bar.

 

The ad’s focus on women searching for the sensible male drinker – a “streetwise Hercules” – is also aimed at getting more women into drinking beer, a long-held goal in an industry trying to attract new drinkers.

 

Neil Walker, spokesperson for the Society of Independent Brewers, says brewers have also responded to the decline by producing more canned craft beer, a growth market, instead of bottles of lager. He also predicts that craft beers will end up on sale in that millennial haven: the coffee shop.

 

“The traditional pub is important and worth protecting, but some of the new formats, like canned beer and kegged beer, are much easier to look after and sell in cafés.”

 

The interest in “craft” is not confined to beer. A record 49 gin distilleries opened in the UK last year, according to the Wine and Spirit Trade Association, and people are paying more for gin. The value of gin sales rose by 10 per cent in the year to January, according to Nielsen, the market research firm, outpacing an 8 per cent rise in volumes.