Beer sales slump: Why Generation Z could make industry’s problem worse

Sales in the beer industry have sagged in recent years as millennials turned to other options, and the slump could get worse as Generation Z comes of age, according to a note published by the equity research firm Berenberg on Wednesday.

Berenberg said the results of a survey of 6,000 Americans aged 16 to 22 revealed that Generation Z is the first age demographic to prefer wine and spirits to beer. Additionally, the survey indicates that Gen Z will consume less alcohol than millennials and other age groups.

“As a whole, Generation Z appears to be more aware of the health and social consequences that alcohol drinking may have and expects to consume alcohol less frequently than previous generations when they are older, as well as consuming quantitatively less on the occasions that they drink,” the Berenberg analysts said in the report.

Overall, 65% of Gen Z respondents said wine or spirits like whiskey and vodka were their preferred alcoholic beverage, while just 35% said beer was their favorite. At present, beer accounts for 51% of U.S. alcohol sales by pure volume, according to Euromonitor. Roughly 64% of Gen Z respondents said they expect to drink less alcohol than their older peers.

Business Insider was first to report on Berenberg’s findings.

Experts attribute declining beer sales in recent years to an increased preference among millennials for craft beers and focus on health and wellness. Anheuser-Busch InBev, the parent company of Budweiser and Bud Light, said U.S. sales fell more than 5% in its most recent fiscal quarter.