Abundance of Choice is Key to Craft Beer’s Popularity Among Millennials

Millennials' preference for small, local companies is a growing problem for large brands, and craft beer is no exception. A recent study from the University of Texas at Dallas (UTD) looked at the reasons.

The prevailing theory experts had for this love between millennials and craft beer was that they prefer brands that align with their values, and craft beers fit the bill.

However, this study advocates for an alternate theory: the difference in availability of craft products for millennials versus Baby Boomers when they were at their most impressionable, beer-drinking ages.

Joonhwi Joo, Ph.D., assistant professor of marketing at UTD, authored the study along with Bart Bronnenberg and Jean-Pierre Dubé.

“This project initiated partly from our personal observation that the variety of craft beers in a typical supermarket has increased quite substantially over the last 10 years or so and partly to determine if how popular media talks about consumer preference is accurate,” said Joo.

The research involved assembling a database from various sources that looked at the history of craft beer brands and the diffusion of craft beers in different areas. 

The researchers found that the beer landscape Boomers grew up with was dominated by Anheuser-Busch, Miller, Schlitz and a small group of other macro breweries. This is vastly different from the one North Texans see today, dotted with neighborhood craft breweries. It's the same for many cities across the U.S. In 2005, there were just 405 microbreweries across the country, versus 1,866 in 2021.

The study found there are stark generational gaps in experiences, especially when consumers reach the legal age to buy alcohol and begin to form strong brand preferences. As millennials purchase more craft beer, every other generation has purchased less; in 2018 those born from 1980 to 1996 accounted for 20% of craft beer sales and allocated 34% of their beer budget to craft beer, versus 20% for Baby Boomers.

So, it is not so much that millennials are generationally attracted to craft beers; rather, it's more an issue of availability when they were forming their preferences.

How will this research impact Gen Z as they reach drinking age? Joo and his peers predict that craft beer’s share of the market will grow as these Gen Zers form their preferences.

“The predicted craft beer share increases from 22.6% in 2018 to 27.4% in 2030 under the assumption of constant availability,” the study states.

Which is great news for local craft brewers, who can't seem to catch a break lately.