"Alcohol Consumption Among Young People Drops to 50%... Down 10 Percentage Points From Last Year"
"Alcohol Industry Faces Significant Pressure"
Focus Shifts to Non-Alcoholic Beer, Low-Alcohol Beverages, and Hard Seltzers
In the United States, a shift in health awareness is leading to a decline in alcohol consumption among younger generations. As a result, major global alcoholic beverage companies are seeking new opportunities with non-alcoholic beers and low-alcohol beverages.
According to Yahoo Finance on August 24 (local time), a recent Gallup survey found that 54% of Americans of legal drinking age currently consume alcohol. This is the lowest level since surveys began in 1939. Even among those who do drink, their average consumption has dropped by about half.
With changes in American drinking culture, the number of Americans who believe alcohol is harmful to health has been increasing every year since 2016. In particular, the drinking rate among young people aged 18 to 34 fell by about 10 percentage points from 59% last year to roughly half this year. The rates for those aged 35 to 54 and those 55 and older also dropped by 10 percentage points and 5 percentage points, respectively, to 56%. This downward trend appeared consistently regardless of income level.
The frequency of drinking has also declined. Twenty years ago, survey participants drank an average of 5.1 drinks per week, but now they consume just 2.8 drinks on average.
These changes are directly reflected in the performance of the largest alcoholic beverage manufacturers in the United States. In fact, recent earnings reports from leading industry players all showed a slowdown in sales growth.
American beverage company Molson Coors and Constellation Brands, the distributor of Corona, suffered the biggest hits, recording sales volume declines of 7% and 3.3%, respectively. Anheuser-Busch InBev, the world's largest beer producer, and Boston Beer Company also saw slight decreases of 1.9% and 0.8%, respectively. An industry insider commented, "We've never faced such significant pressure before."
Gavin Hattersley, CEO of Molson Coors, responded to an analyst's question during a recent earnings call about whether consumer behavior could get worse by saying, "We have not seen any improvement in consumer confidence or behavior."
"Selling Better Than Beer"... Alcohol Industry Pursues Non-Alcoholic Beer as a New Opportunity
In response to this trend, the alcoholic beverage industry is pushing a "Beyond Beer" strategy. Just as the tobacco industry sought new opportunities with smoking cessation and alternative products, alcoholic beverage companies are now focusing on non-alcoholic beers, low-alcohol beverages, and hard seltzers (low-alcohol drinks made by combining carbonated water and alcohol).
Anheuser-Busch reported that sales of non-alcoholic beers such as Corona Cero increased by 33%, far outpacing the 5.6% growth rate of its main products like Corona, Michelob Ultra, and Budweiser. Constellation Brands stated that its Corona non-alcoholic product is experiencing the second-fastest market share growth in the U.S. non-alcoholic beer market.
Boston Beer Company announced that its "Beyond Beer" product line, which includes non-alcoholic and low-alcohol beverages, now accounts for 85% of total sales volume, surpassing beer, wine, and spirits. Jim Koch, co-founder of Boston Beer Company, said, "Just three years ago, we never considered products outside of alcohol, but now we are seeking new opportunities."
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