Drizly: Millennials Buying More ‘Macro’ Beer

Earlier this month, online alcohol marketplace Drizly promised to share regular insights gleaned from thousands of daily transactions that occur on the company’s e-commerce platform.

Drizly’s first significant finding, and one that should be of interest to U.S. craft brewery owners, is that millennial consumers — at least those using its booze-to-your-door delivery app – have been steadily shifting their dollars toward macro brews and corporately owned craft brands since 2015.

“While the industry has been reporting a slowdown in craft beer growth only recently, and a slowdown of beer overall, the early adopting millennial Drizly consumer has been actively shifting their spend from craft beer to macro beer, wine, and spirits for the last couple of years,” the company wrote on its “Data Distillery” blog today.

According to Drizly, which operates in 25 states, “macro” brands — which it defined as any beer produced by a company that does not meet the Brewers Association definition of what it means to be a craft brewer — represented 58 percent of beer sales on Drizly during the second quarter of 2017, despite the fact that more than 90 percent of the SKUs available on the online marketplace actually come from BA-defined craft brewers.

In its report, Drizly looked at sales of BA-defined craft beer as a percentage of total beer transactions that occurred on the platform over the last two years. The company compared data from the first half of 2015, when the BA reported that craft volumes were up 16 percent, and the first half of 2017, when the BA reported that craft sales were up just 5 percent.

“When comparing the first half of 2017 to the first half of 2016, craft beer is down only 1 percent,” the company wrote. “However, in comparison to the first half of 2015, it is down 8 percent, despite the modest uptick in Q2 this year.”

Drizly broke the data out further, and found that consumers who are still purchasing craft beer at the highest rates are drinkers in their 30s. Purchasers in their 20s, however, have “shown less affinity for craft beer,” the company said.

“We have added a significant amount of SKUs from the craft sphere and we would have expected to see at least some growth,” Drizly spokeswoman Trisha Mack Antonsen told Brewbound.

Indeed, BA-defined craft brands represented 38 percent of all beer purchases made by Drizly consumers between the ages of 21 and 29 during the first quarter of 2017. That’s compared to 44 percent for drinkers between the ages of 30 and 39. Craft purchasing habits for both groups trended upward during the second quarter of 2017, however, to 41 percent and 46 percent, respectively.

But when you look back at those same groups’ habits during the first quarter of 2015, BA-defined craft brands represented 44 percent of beer purchases made by Drizly consumers between the ages of 21 and 29, compared to 49 percent for drinkers between the ages of 30 and 39.

In other words, both groups are making fewer craft purchases, but millennial consumers are increasingly spending more on macro beers.

It should be noted, however, that Drizly has grown considerably during the last two years. Midway through 2015, consumers in just 15 major metropolitan markets had access to the company’s mobile app, compared to more than 70 cities today.

Even as Drizly has mainstreamed, co-founder Justin Robinson maintains that its user base hasn’t evolved to the point of impacting the data. He pointed to metrics such as average transaction size, average purchaser age and average income, which have remained consistent as the company has scaled.

“We attempted to break things out that could have caused a change in the data,” he told Brewbound. “And we understand that consumer bases are going to evolve as we evolve. But regardless of what is happening on our platform, and regardless of the consumer makeup possibly changing – from a consumer that is a craft beer buyer to someone that is less likely to buy craft beer – the 30-39 age group is still buying more craft beer, compared to consumers who are 21-29, which is an important trend to pay attention to.”

In addition to looking at topline trends and age-level insights, Drizly also broke the data out by geography, consumer type, package type, container size, and alcohol by volume. It also highlighted a few notable brand trends, including sales for Michelob Ultra, which have grown sixfold since the first quarter of 2015.

Additional craft beer insights are available on Drizly’s “Data Distillery.”

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