THE MILLENNIALS AT THE BAR

THERE'S A NEW WAVE COMING,
AND IT'S UNLIKE ANY THAT'S COME BEFORE

BY PAMELA GOVINDA

They're called the Millennials, those Americans born between 1979 and 1994, and while only a small portion are now of drinking age, those who can legally drink are already players in the beverage alcohol world.

They're grabbing cans and bottles of Pabst Blue Ribbon, Miller High Life, Michelob Ultra and Yuengling; they're helping drive the explosive growth of Jagermeister, Hpnotiq and other once obscure spirits; and whether male or female, more than any other age group, Millennials consider wine a regular part of their lifestyle.

The Millennials (also known as Generation Y) are today's youth and tomorrow's bigwigs, and marketing experts are slating them as the largest consumer group in U.S. history. Out of the sixty million strong Millennial population, it's the band of twenty-one to twenty-five year olds that marketers target with dazzling images of new drink brands. It also happens to be an age group that bars and restaurants should be paying close attention to because the tastes of young adulthood are pushing the on-premise industry into different directions.

WHAT'S BREWING?

Beer, the all-time student favorite, is starting to see the millennial shift. Having acquired a taste for fruit driven cocktails, the youngest drinkers are not taking to beer as much as in the past, but when imbibing a cold one it's likely to be a light beer, in every sense of the word.

Dylan Prime drinks guru and partner Michael Waterhouse, NYC, attracts Millennial Martini fans with massive presentations crafted with flair, like this.

Beverage director Tracy Finklang, at the restaurant brewery group, Old Chicago observes, "We get asked for mainly pale ales and lagers among that age group. We do still get requests for some of the chewier beers like porters and stouts but the light beers are big. We're also seeing a huge demand for low-carb beers because everyone's losing weight on high protein diets right now."

Finklang isn't the only one to observe this. Mark Green, president of Kahunaville, with locations in Las Vegas, Delaware and Massachusetts, also maintains that when young drinkers pick brews, many of them are opting for low carbohydrate beverages like Michelob Ultra.

So while low-carb beers are helping to shape the svelte images of protein-munching youth, there is another type of beer that is appealing to a Millennial subset, especially in the hip bars of urban city centers. Pabst Blue Ribbon, also known as PBR, hit big in the last couple of years and seemed to spark off a trend for no-frills, blue-collar beers that sell at student prices.

Brand-marketing company Sterling Group consults with beverage companies to create packaging and marketing strategy to sell products to today's young generation. Mike Bainbridge, executive vice president of design, is privy to the world of their drinking desires through focus groups held across the country. He finds that if the product is right for the cultural times, it just takes a relatively small group to take the bait and before long a drink can become hugely successful.

"When it comes to the success of a brand or a product, all it takes is for someone at street level to pick up on it," Bainbridge says. "Our job is to stay one step ahead of the game and sense which direction the trends are heading. A classic example of beer buzz that was endorsed at that level would be Pabst Blue Ribbon. It's this very grass-roots type of beer that was co-opted by middle class youth and it started in Seattle, of all places."

OLD IS NEW

PBR isn't the only beer endorsed by young hip things. In fact there is a PBR backlash out there because certain beer drinkers feel that Pabst has lost its allure and returned to the mainstream. Galapagos, in Brooklyn's hip Williamsburg neighborhood, recently switched from PBR to another old name beer that has been revived in New York, Rheingold. Though Gallapagos owner Robert Elmes says that local Brooklyn Lager sells more, Rheingold appeals to the crowd as a cheaper retro alternative.

A back-to-basics beer generation? It would seem so according to Phil Rosenthal, marketing coordinator at House of Blues "For some reason Miller High Life is very fashionable right now. Overwhelmingly kids at that age are into drinking cheap domestic beers by brand name." Miller's original blue-collar beer had been experiencing plummeting sales figures in the last couple of decades. If Miller High Life has somehow become the cool beer among the younger generation, it may be because it fits the "so uncool it's cool" mantra, and it epitomizes the retro grunge culture that many young folk have signed up to.

If young beer drinkers have migrated from microbrews to low-carb and retro beers, what else? "I see beers going for the boutique, specialty angle, much like the super-premium vodkas," says Bainbridge at Sterling Group. "There's evidence of this from the behemoth Anheuser-Busch World Select, which seems to have gained more traction. Beers need to compete much more successfully against spirits which are inherently cooler and more stylish, even for the younger twenty-one to twenty-five year old crowd."

DIFFERENT STROKES

Describing exactly what makes this generation tick is no easy task because it changes according to neighborhood, musical genre and social circle. Will Jacobus, director of beverage operations, Dave and Buster's, says "There are different things going on at our different locations. Walk into the Dave and Buster's in Orange County and then head into one in Irvine and it's like stepping into entirely diverse worlds. The taste and styles change and that's why it is difficult to define exactly what Gen Y are drinking." Though one thing Jacobus could confirm is that, by and large, the trend is moving away from beer to a spirits and martini movement.

When it comes to mixed drinks, the youthful sweet tooth is key. "We have a huge list of shots and shooters that are immensely popular," shares Sue Jeffers, the owner of Stub & Herb's, a watering hole and restaurant across the street from the University of Minnesota. "We create them ourselves and label the drinks with fun names to engage the crowd." Some of their most popular libations are the Scooby Snack (Captain Morgan, melon liqueur, peach schnapps, pineapple juice and cream), and the immensely popular Bong Water (raspberry liqueur, Southern Comfort, amaretto, Coke, Sprite and pineapple juice). Such heady mixes may sound like headache-inducing formulas but appeal to the clientele brought up on sweet beverages and sodas.

Vodka is the spirit to drink among the nation's hip young things. Anecdotally, Grey Goose and Belvedere seem to be attracting young attention, with flavored vodkas being particularly popular among young-aged cocktail drinkers. Vodka also happens to be hugely popular when it comes to stirring a little Red Bull into the mix. While lots of others compete, Red Bull is still considered the energy drink to imbibe at that age group. Practically every establishment we spoke to sells Red Bull and vodka by the truckload.

BULLISH

Jacobus at Dave and Buster's says, "We used to serve quite a few energy drinks but since 2003 we've stuck solely to Red Bull. We're actually making cocktails with vodka and the energy drink that are designed especially for the college kids that come in. We've compiled a list and it's up to them which vodka they'd like us to pour. The returns on that have been huge; our sales for Red Bull went up by 370% since last year."

Many nightclubs pour Red Bull all night, as is the case at RED in the heart of South Beach. Owner Jennifer Polsky reckons that certain drinks do better according to musical genres. "During out trance and house nights we see the energy drinks and Grey Goose move a lot. We've gone through different energy drinks here but Red Bull seems to have the most staying power, and though it isn't nearly as popular as Red Bull, Impulse comes in second."

Pushed to describe what general movement he witnesses among Millennial drinkers, Jacobus says, "The current generation are definitely drinking differently. I've noticed that they are skewing way from any type of beer and more towards spirits in the form of colorful cocktails. Unlike my generation at that age, the generation Xer's who were more about a beer and a shot, these guys want the biggest blue Martini they can get just so they can be seen with it."

BRATTY BUNCH

At the recent Cheers conference, John Gillespie, president of the Wine Marketing Council, pointed out that more Millennials automatically accept wine as a part of their life style than any other age group. But for some young drinkers, wine is still a bit too difficult, according to the executive director of Wine Brats, Steve Richardson (Wine Brats is a nonprofit organization that seeks to demystify wine among the younger generation through events, more than 350 at various wine bars and restaurants last year.)

"One of the difficulties to overcome at that age is intimidation," says Richardson. "We try to tell them that they shouldn't be embarrassed in front of the waiter or their dining companions if they are unable to pronounce wine names ­ all that matters is that they enjoy drinking wine."

Ian Smith, owner, Vinocity, Atlanta, GA, says he's seen the emergence of a more adventurous wine drinker. "They are still mainly asking for merlot and chardonnay but in the last couple of years we have noticed that Gen Y wine drinkers are stepping out of traditional boundaries and trying out other grape varieties. When it comes to white wines pinot gris and pinot grigio are doing really well. In terms of red, zinfandel is popular and syrah, or shiraz, sales have been going through the roof. Wine drinkers at that age take really well to the latter grape because it is usually packed with fruit and it pairs nicely with food."

Is there anything that has remained a constant when it comes to the last couple of generational turnovers? According to our sources there is one mainstay that survives the years: good old Captain Morgan and Coke. It is somewhat comforting to know that something hasn't changed.

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THUGS AND HULKS

The hip-hop crowd has had an explosive effect on current drinking trends, but not just among Cognacs and Champagnes. "Hpnotiq is very big among the hip-hop crowd, everyone is drinking the Incredible Hulk right now," says RED nightclub owner Jennifer Polsky of her South Beach crowd. "It's a mix of Hpnotiq and Hennessy. Thug Passion is another drink that they're asking for and that is made up of Alizé and, again, Hennessy cognac."

Both drinks are entrenched in rap culture. Hpnotiq, now in the Heaven Hill stable, has seen phenomenal growth (See Growth Brands story, page 32.) Their resident expert on the cognac, vodka and tropical fruit juice drink, Nick Storm Hpnotiq caught fire one particular night.

"When we launched Hpnotiq on the market we were throwing these parties in the Bronx and Brooklyn. There was one party at Justin's [rap star P Diddy's restaurant] where there were about 500 people. I noticed that all the women were drinking Hpnotiq but the guys weren't so much, because they were saying that it was too fruity, it was blue and just seemed too girly for them. So the bartender Victor Alvarez had a brainstorm and poured Hennessy into it." The drink turned green and was an instant hit. Not long after the party, Nick was hearing back from liquor stores that customers were coming in to buy the ingredients and were referring to the drink as "the Hulk." That was when Heaven Hill decided to officially baptize the cocktail the Incredible Hulk. Once the movie was released it wasn't long before the drink went mainstream.

Thug Passion (a mix of Alizé and Cognac) has been in the urban mix for years, soon after the now departed 2Pac [Tupac Shakur] rapped about the drinking Alizé with Hennessy in a song he called Thug Passion.

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