Spirits Companies Just Lost Their Boogeyman
If you read this blog at all, or if you keep up on the financials of the spirits industry at large, you already know that the big spirits conglomerates have mostly seen declining sales, mostly reduced staff (aka FIRED HUMANS), and mostly issued earnings statements that are full of corporate gobbledygook.
In these statements, and they’ve all done it now, they have several boogeymen that have bedeviled their ability to generate more wealth for their shareholders.
Spirits Companies Are Blaming Everyone For Their Woes (Except That Damn Sasquatch!) but mostly Gen Z.
Here’s a list in no particular order, and we will dive into each of them briefly. Which if you know me, you know is a lie. I don’t generally do briefly well.
Let’s gas up the Chrysler and drive.
Gen Z.
“They’re not drinking as much as other generations.” “They’re not as social as other generations.” “They don’t go out.” “They’re always on their phones.” “They’re more health conscious, they’re not eating meat, they smoke weed, they vape, they bake bread and knit sweaters like little old ladies…”
I’ve been calling out this “not drinking as much” as other generations bullshit for awhile now. It’s been spoken by every CEO and reported and repeated breathlessly by analysts, major media, and social media influencers without consideration that it’s flat out fucking nonsense.
One half of Gen Z isn’t even 21 years old. Gen Z was born between 1997 and 2012. Think about this critically for just a moment, and the CEO excuse unravels faster than Sandra Bullock driving a bus. Half the damn generation cannot and should not be drinking period.
The other half is hopefully at the “establishing a career” stage of life. I know, I know, the market is difficult right now.
Data provided by the companies were stating that drinking budgets for Gen Z was less than $400 a year. When I was in my 20’s, if I had $10 that was a Jack and soda water once a week, which is roughly $480. I’d say based on my entirely anecdotal experience, Gen Z was right on pace.
The part about Gen Z not being as social, is also fucking hog wash. Without grotesquely overgeneralizing here, many of them just socialize differently than previous generations. They’re the first generation to grow up not knowing a world without hyper-connectivity. Big companies, and marketing for that matter, haven’t found ways to connect with them, where they are. They’re still trying to do things the way they’ve always done them. Flooding them with oppressive advertising has rendered that form of marketing utterly meaningless as the youths these days are nearly immune to online advertising.
They don’t go out. The spaces that we all went to, or go to, aren’t made for Gen Z. They’re also set in their ways and need to evolve to capture their mind share. I’m not saying Gen Z doesn’t appreciate an excellent craft cocktail bar, or a seasoned dive bar, but these are traditional spaces. I’m not saying every bar needs to become a petting cat bar, but they need to look at what resonates with the youth of today. Just as they did when we were young.
They’re always on their phones. Yes. Figure it out. Make it easy to learn about a spirit in a liquor store that isn’t able to connect with younger customers who would rather research things on their phone. Make it easy to get a coupon deal at a bar to drink your spirit that can easily be redeemed. Bars should innovate and allow people to open and close tabs from their phones without having to wait to tab out. Smarter people than I should be able to bring some Gen Z into their companies and have them help with marketing.
They’re more health conscious. Hopefully we are all getting better at this. Gen Z is not much different than previous generations. Yeah, they’re more socially aware of the costs of eating Big Macs (their sales are down too, and guess who they’re blaming?), but all the local smash joints always seem to have a LOT of younger customers when I go.
They bake, and knit. Well, that’s kinda cool actually. I’m learning a lot about cooking of late, but I can’t get bread to work, so tip of the cap.
Also, a new IWSR report that just came out and is being included here, is that new industry data shows that Gen Z is now inline with previous generations, as was expected.
The CEO’s were always full of shit, the media incurious, and people lost jobs. Fuckery all around and a lot of folks should be embarrassed.
Here’s some contributing factors outside of just blaming the lack of underage drinking.
Wegovy/Ozempic-
Did you know that about 1 in 8 adults in the United States., or approximately 13%, have reported using a GLP-1 drug like Ozempic/Wegovy/Mounjaro. Of those, around 6% are currently taking such medications. One in Eight. Did you also know that GLP-1’s, which contains semaglutide, may reduce cravings for alcohol and help some individuals cut down on their drinking. Research indicates that it can lead to lower alcohol consumption and decreased desire for alcohol in people with alcohol use disorder. Not everyone of course, in fact I know a few folks that have not had this experience. I also know a few that have.
Macroeconomic environment-
They won’t mention the Dumb Fuhrer, but the unpredictable nature of an apparently unstable government that throws tariff threats around like Oprah giving away cars, is reasonably believed to be bad for business. This is also cover for bad investments, poor distribution, bad management, corporate brand bloat, and ineffective marketing.
Weed/THC decriminalization/legalization-
Boomers are moving to weed faster than anyone else, but they get no blame, let’s blame the kids, especially the 13yr olds!
Social Media-
The doom scrolling and short attention spans have impacted their ability to market effectively. Frankly I believe deeply that people are becoming more and immune to influencers as they’ve become more and more obvious, and authenticity has gone right the fuck out the window as everyone and their sisters cousins brothers are trying to be influencers. There’s very little integrity left with influencers and the backlash is overdue.
Saturated markets-
Duh. There are too many labels. Too many Indiana sourced NDP labels with shitass stories. Too many Tequilas. Too many everything. Impatience with growth has caused brands to trend chase like crazy, and the amount of strange finishes continues unabated and at an increasingly rapid, and alarming pace. Big companies are more willing than ever to sell brands to other suckers for cash money. All in an effort to appear leaner, more agile, and more adaptable to increasing shareholder fucking value at the expense of their people that work so hard for the man.
Ultimately this downturn isn’t as bad as is being reported. Yes, there’s bloat, but profits are nearing pre-Covid levels. Yes, sales are down, but profits are increasing with the still growing super-duper-uber-premium releases.
I cannot wait to hear how CEO’s spin the rebound…. I’m sure it’ll be more bullshit and not the blind-stinking-doo-dah-luck that they stumbled upon. At least they stopped blaming avocado toast.
Thanks for reading as always, would love to hear your comments and feedback anytime, anywhere.
- Mickey Pinstripe