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White men are the future of beer — and that’s terrible news for the struggling industry

White men are the future of beer — and that’s terrible news for the struggling industry

Business Insider

By Kate Taylor

February 24, 2018

Younger generations are ditching beer— with the exception of one group.

A report from Berenberg Research found that members of Generation Z preferred spirits (like vodka or gin) and wine to beer.

“Generation Z marks a turning point, being the first generation to prefer spirits to beer,” analysts led by Javier Gonzalez Lastra wrote in the report.

However, one segment of Gen Z still prefers beer to other types of alcohol: white men.

For a long time, beer companies only needed to appeal to white men to grow sales. White men have historically made up a hefty part of the American population. They also drink more alcohol on average than women of all races, as well as more than men who are not white.

However, that’s all changing.

Women’s drinking habits are catching up

Firstly, Berenberg found that women of all races are narrowing the alcohol “gender gap” between men and women.

Analysts estimate that Gen Z women drink 24% less than their male counterparts, while millennial women drank roughly 40% less than millennial men when they were between the ages 18 and 22.

The change seems to be driven by men drinking less, as opposed to women drinking more. In fact, Gen Z is drinking less than the generations before it in general.

Beer companies are already trying to find ways to convince young women to drink their products instead of wine or liquor. Last year, Anheuser-Busch InBev announced that for the first time ever, it would be launching a brand marketed exclusively to women, with a rebrand of its Lime-A-Rita line.

America is getting even more diverse — and beer companies are playing catch-up

Additionally, the US is becoming increasingly diverse. As a result, other racial groups — especially the swiftly growing number of Hispanics in the US — are now crucial for beer companies.

“There will be 27% more 20- to 34-year-old Hispanics in Generation Z than was the case for the Millennials generation,” the report states. “Alcohol categories favored by this sub-group will face the greatest demographic tailwind.”

“Conversely,” the report continues, “white male Generation Zers drink significantly less, and account for a smaller proportion of the population.”

While historically white men and women drink more than their black and Hispanic counterparts, that gap is narrowing — again, primarily driven by white Gen Zers drinking less.

Berenberg predicts that, as Gen Zers make up an increasing proportion of Americans who can legally drink, companies that sell products aimed at subgroups that aren’t white men have the best chance of growing sales. For example, analysts found that women of all races are more likely to buy flavored spirits. Similarly, Berenberg predicts that tequila sales are likely to rise, due to Hispanic Americans’ more positive attitudes towards the drink.

Still, it’s unlikely that beer companies will forget about white men all together. The subgroup still drinks more alcohol than any other Gen Z subgroup, according to Berenberg analysts.

“White males are not only more likely than any other sub-group to have consumed alcohol in the past week, but those of them that did are more likely to have consumed a greater number of alcoholic beverages during the week,” the report states.