Millennials are ruining everything, and now they’re coming for the beer industry.
The age group people love to hate on dislikes cereal, they sort of hate casual dining restaurants and apparently they eat way too much avocado toast instead of saving up for a home, according to one misinformed millionaire. But as it turns out, millennials have also been having a negative effect on the beer industry for a few years now.
Goldman Sachs recently caused a stir when it downgraded Boston Beer Company and Constellation Brands stocks, according to a report from an analyst obtained by CNBC. The Boston Beer Company includes brands like Samuel Adams and Angry Orchard, while Constellation Brands oversees beer brands like Corona, Modelo, Ballast Point and more.
“As we explored back in 2014, we expected a cyclical rebound in total alcohol consumption post-recession,” chief analyst Freda Zhuo of Goldman Sachs said via CNBC on Monday. “The cause [for shifts in beer and wine market penetration] is younger groups shifting away from beer.”
The Goldman report blamed “sluggish sales” for the downgrade, coupled with the fact that millennials don’t drink as much beer as previous generations, opting for wine and spirits over beer.
An increase in marijuana use is also partially to blame for lackluster beer sales. And the market could stay this way for the next 10 years, according to a recent report from the financial services firm Cowen.
“We believe alcohol could be under pressure for the next decade, based on our data analysis covering 80 years of alcohol and 35 years of cannabis incidence in the U.S.,” Cowen analyst Vivien Azer wrote in a note to clients in April 2017, via CNBC. “Since 1980, we have seen three distinct substitution cycles between alcohol and cannabis; we are entering another cycle.”
Seems like cannabis-infused beer might be something to explore.