There’s rumbling in the beer industry this week. America’s biggest independent brewer Boston Beer Company was downgraded by Goldman Sachs, based on decreased sales and unfavorable upcoming projections for the beer industry in general. Why? Wine and legal cannabis is taking its toll on the suds.
To be fair, Goldman actually cited three main factors hurting the beer industry. One, millennials simply aren’t drinking as much as previous generations. The coveted demographic has seen almost a decade worth of consumption decreases. Two, what that generation is drinking isn’t beer, it’s wine and spirits. And, lastly, there has been a big upswing in marijuana sales that has dented beer sales over the past few years. So as much as we like to talk about how big the beer industry is becoming, it really is still struggling to keep up with an ever-widening marketplace of intoxicants.
It’s not just those scapegoated millennials who are to blame here, either. Goldman’s chief analyst Freda Zhuo noted that “the 35-44 year old cohort shows a shift away from Beer to Wine & Spirits.” Two major demographics leaving beer behind is going to be a problem for an industry already struggling to fight increased interest in imports and internal soul-searching over independent and craft identity.
The lowering of expectations on independent brewers like Boston Brewing Co. comes after a steep report lowered expectations on macro-giant Miller Coors. That report cited a 22 percent decline in beer consumption overall since the 1980s, with a nationwide 18 percent increase in marijuana consumption over the same period. Overall, it’s hard to be mad at weed for stealing beer’s thunder. Beer is, after all, probably a bit worse for you with all those carbs and sugars. Whereas, marijuana is quickly getting associated with “medicine” in the mind of the public.