Beverage and Brewing Companies at a Turning Point
- Apr 7
- 2 min read
Updated: 2 days ago
For long, numerous beer brands’ activities have been conservative and successful. However, if they solely rely on their old generation consumers and fail to evolve their products in facing the younger generations’ demand, they may be significantly challenged. Being insightful about consumer behavior is essential.
Over the past decade, there has been a steady decline in the alcohol consumption around the world, particularly in Japan. Unlike the older generation in their forties and fifties or above, their younger generation shifted from the alcoholic to the non-alcoholic beverages. This shift has primarily been driven by the increased health awareness, personalized lifestyle, recognition of the social costs of drinking, and the fast expansion of the non-alcoholic beverages.
This decline in the alcoholic beverage consumption is not a temporary but rather an unavoidable trend. The brewers of alcoholic beverage could not sustain a long-term growth based on their low-priced, alcohol-centered product portfolio alone. So the questions are raised.
If the younger consumers are drinking less alcohol, what are they choosing instead? And who influences that choice — the consumers or the breweries that continuously adhere to their outdated assumptions?
The brewers ought to create new categories for products. Japanese brewers, for example, acknowledged that the domestic alcohol consumption would not recover and acted accordingly. Asahi, in particular, expanded its operations globally by acquiring European brands including Pilsner Urquell, Peroni, Grolsch, Tyskie, and Lech. Also, in the neighboring market of South Korea, they have become a key growth driver for the beer products.
By contrast, American brewers have remained less aggressive. How are they responding to their younger consumers? Are they meaningfully distancing themselves from the legacy brand images? Or, are they building their strategies on the assumption that alcohol consumption will continuously thrive? Are younger consumers involved — directly or indirectly — in their product decision-making process? Their global market share may not be telling them what they need to know, and their product development strategies may be more rigid than they imagine. Nevertheless, history tells us the truth – those that cling to tradition are displaced by those willing to experiment.
For many brewers, strategic transition is no longer an option. New products must be created around younger consumers. This requires the courage to connect preference discovery to product testing and development. The young, creative individuals capable of engaging in such projects are also needed.
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