Heineken USA CEO Maggie Timoney laid out several contributing factors that she sees chipping away at the beer category during a fireside chat on Day 2 of the National Beer Wholesalers Association’s (NBWA) Annual Convention in San Diego.
Those challenges include Generation Z’s desire for new and next, which led to a “churn and burn” that has put “a ton of pressure on suppliers” and distributors, and a litany of new products taking up shelf space and mindshare.
The encroachment of ready-to-drink spirits-based products into traditional beer occasions, which Timoney credited to hard seltzers guiding the way.
Also, cannabis. And online gambling ads. And consumers’ conflicting desires for indulgence and health and wellness, mixed with wearable biotechnology, which helps remind consumers that their night out affected their recovery.
“All of this data coming in is just chipping away at our revenues,” she said.
All of this is part of a “new Olympic sport competing for the share of wallet,” Timoney said.
“People have food to put on the table, gas in the car,” she said. “They go out maybe once for a bite to eat. Alcohol is way down their list now.”
Zeroing in on online gambling, Timoney noted that for many young people, they’re being force fed ads through their smart devices.
“That $5 or $10, which doesn’t seem like a lot in the big scheme of things – it is a big deal,” she said. “It’s a 6-pack of beer. It’s a couple of pints on a night out in the on-premise.”
Even with a host of challenges, Timoney’s parting message was not to panic. Beer, she said, will bounce back once consumers have more money in their wallets.
However, Timoney encouraged distributors “to be choiceful who we let into our houses.”
“As a supplier, we’re very thoughtful and intentional on what we ask you to do,” she said. “On the other side, we need to be thoughtful and intentional so that we don’t let the enemy inside our walls, because you get all the pressure of all these other new products and suppliers coming knocking on your door, taking up your share of mind.
“We don’t want to wake up in 20 years and look at the NBWA and the beer and beverage is out of balance,” she continued. “And that’s something for us all to ponder on.”