Unless major shifts are made in the way they position themselves to younger consumers, the beer industry should be prepared to take a back seat to cannabis as more states consider legalization.
In order to get an understanding of just how embedded into our culture drinking is, all one has to do is turn on primetime TV. During any major award show or sporting event viewers are inundated with advertising from multiple different alcohol makers tasked with the goal of keeping Americans boozed up.
The problem is that a vast majority of Americans aren’t drinking as much as they once did. What are they doing instead? Smoking weed! Recent studies revealed that cannabis usage reached an all-time high (no pun intended) among the 19-30 age group during 2020. The recent increase in marijuana use bears the brunt of the blame for steadily declining alcohol sales.
There are numerous factors that can help to explain when and why consumers are starting to choose bud over booze. Here are just a few.
Cannabis Is More Acceptable Now Than in Years Passed
Older depictions of marijuana usage in the media may bring to mind images of the disheveled, disoriented stoner without any cares in the world. Thanks to the increase in statewide legalization of marijuana, those perceptions are being broken daily. Now that consumers are able to walk into the doors of their favorite dispensary to purchase their pot product of choice the same way wine moms can buy their favorite bottle of vino, it’s easier to envision marijuana users as coworkers and colleagues as opposed to extras in a stoner movie from the 70s.
Alcohol Can Be More Costly Than Marijuana
It’s no secret that young people don’t have very much in terms of disposable income, especially as they’re just starting out in their early 20s. That’s why it’s paramount for them to get as much bang for their buck as possible. The price of a beer at any given bar in a major metro in the country is about $6. That means, a night out drinking could run someone anywhere between $20 and $50 a night.
That doesn’t even begin to factor in the physical toll of a brutal hangover that could be bad enough to keep you away from work for a day or so. Typically a gram of quality cannabis runs anywhere from $10-$20, and a few could be enough to last a modest consumer all week.
Marijuana Meshes Better With the Lifestyles of Millennials
After Colorado, Oregon and Washington legalized cannabis usage for adults, the fears of every major beer brand became reality. Craft brewers have suffered a recent decline as well, but that’s been the case nationwide due to slight but noticeable oversaturation of the market. The case with Colorado, Oregon and Washington is especially intriguing given the fact that beer volume is down in each of the states within the continental U.S. that were first to introduce legalized cannabis.
What complicates matters even more is that data shows that markets with legalized cannabis are under performing other craft beer markets across the country overwhelmingly. The question is whether or not this is an indicator of things to come for both cannabis and craft beer brands.
One of the reasons cannabis brands were able to take such a huge chunk out of the craft brewery market share is because of the way they’re able to position themselves as lifestyle brands. By seeming in line with spin classes and pressed juice bars that are popular with the millennial demographic, it’s easier to convince younger consumers that their brand and products coincide with their lifestyles seamlessly. Evidence of that is displayed by the wide-range of demographics that newer cannabis products and brands are targeting, which include health aficionados and plain old stoners just looking for a buzz once they get off of work.
Legalized weed has been a major disruption to the craft beer market in its infancy. Unless major shifts are made in the way they position themselves to younger consumers, the beer industry should be prepared to take a back seat to cannabis as more states consider legalization.