What: We talked to Manny Gonzalez, Senior Director, Multicultural, at Moet Hennessy US, about the challenges of marketing alcoholic beverages to Millennials in the US.
Why it matters: Millennials are a crucial sector of the U..S population, they have a 25% share, and studies have shown they drink less than previous generations. The succesful engagement of millennials is increasingly important for alcoholic-beverage brands.
Why is Marketing to Millennials so Difficult?
Millennials are an elusive segment of the population. Millennials include people born between 1985 and 2000, which results in a wide range of ages, values, and interests. Perhaps this is what makes them the hardest group to market to, and it is increasingly important for brands to understand how to connect with them since they account for 25% of the population.
Perhaps the two most distinctive features of Millennials are 1) their ability to adapt easily to new technologies (and their broad interest in using them), and 2) they like the values of a product to coincide with their own. This means that Millennials are more likely to consume a product that supports a cause they believe in. Millennials are creators; most of them post their own content online, and they like to interact with content that speaks to them.
1. Millennials Don’t Like Your Parents’ Booze
Recent studies have shown young people drink less than previous generations. How is that possible? It might have to do with several factors. To begin with, they are more into “healthy living” than their parents. According to an Eventbrite survey, only 1 out of 10 millennials thinks getting drunk is “cool”, while 4 out of 10 think being drunk is “embarrassing”.
Another study shows millennials are now consuming more cannabis than beer, but the most important reason lies at what we perceive as “drinking less”. According to Manny Gonzalez, senior director, multicultural at Moet Hennessy US, “while millennials in general are drinking less, those millennials that continue to drink are drinking more craft beer, more wine, and more premium spirits”. It’s not a matter of how many millennials are drinking, but rather of what they are drinking.
They’d Rather Try Something New and High-Quality
“Millennials are always looking for something new, they’re always looking for the latest,” explains Gonzalez. “[They are in the] age range where consumers are most promiscuous; in other words, they’re more willing to experiment with different brands, different categories, than their older counterparts,” which is why cocktail bars and mixology parlors are so popular among them.
And even better if the quality of the brands is really high. 20 years ago, young people weren’t used to premium spirits; today there seems to be a close link between premium alcoholic drinks and rarity, which makes them twice as interesting. “If you tell them a single-malt scotch is pure, or is rare, or ‘there are only 100 barrels of this scotch’, they’ll find that appealing because of the exclusivity of that particular spirit,” asserts Gonzalez.
2. Marketers Need to go Where Millennials Are
If they wish to succeed, alcohol marketers need to understand how the landscape has changed. “Twenty years ago bars and nightclubs and restaurants were great channels for alcoholic beverages to promote themselves,” explains Moet Hennessy’s Manny Gonzalez. “Young people went to nightclubs to listen to the latest music and to connect with people. Well, those two things can now be done quite effectively over the internet.”
Millennial consumers are constantly increasing their purchase over the internet; alcoholic beverage companies need to get smarter at that.
Thus, if millennials don’t go to where you are, you need to go where millennials are. The problem is, in Manny Gonzalez’s words, that “at the end of the day you still have to direct people to the place of purchase“, which in many cases for millennials is the Internet. E-commerce has increased dramatically, but “due to laws and legal restrictions, the alcoholic beverage industry hasn’t been able to move as quickly to online purchase“, says Gonzalez. Then, what alcoholic beverage brands need to do is be present in digital and social media. At this point, everyone knows millennials are very active in digital in social media, and yet, “Some brands are overinvesting in traditional media and not enough in digital media,” points out Gonzalez.
3. Making Mistakes is Easy…
“Because millennials are experimenters, brands need to be careful with what they determine to be a trend“, Gonzalez claims while he recounts how, six years ago, it seemed the vodka trend was going to be around forever, but “One could argue quite easily that vodka trend turned into a vodka fad.”
… Because Millennials See Right Through You
“The second mistake that brands make,” says Gonzalez, “is when they promote a brand or product that lacks authenticity.” A recent study shows 37% of millennials are willing to purchase a product or service that supports a cause they believe in, even if it means paying extra. Brands’ values are increasingly transparent, and young consumers know the difference between fragile values that are only a marketing façade and true support for a real cause. “You’d be amazed at how many brands partner up with super popular personalities and celebrities that the millennial consumer sees right through, they say ‘I can’t believe that X celebrity would ever drink your product.'” Then, it doesn’t matter if brands position themselves in digital media if everyone can see they’re not authentic.
… And They Can Tell When Content is Memorable
Going to digital and social media is not enough. Every brand is targetting millennials right now, in order to really get their attention, content needs to be very relevant to them. One thing that they are very receptive to is storytelling. “Instead of trying to get their message across in a 30-second TV spot, [alcoholic beverage companies] now have the opportunity to do that through videos that they stream through social media like Instagram, Facebook, and YouTube,” suggests Manny Gonzalez, “and instead of cramming it into a 30-second ad, they can tell the story the brand wants to tell.”
4. Millennials Embrace Diversity
Not all millennials are created equal. For example, numbers show Hispanic millennials over-index in all social media, as well as in mobile-device use. “We’ve seen for a long time that [Hispanics] were very disappointed in terms of content coming from the traditional Spanish-language media channels, and certainly the English-language media channels,” says Gonzalez. “They discovered that the Internet, through social and digital media, is more inclusive of their interests and lifestyles than the traditional media have been.”
But perhaps the most valuable lesson of all is that, while every person comes from a different place and culture, today young people are united precisely by diversity. “Millennials, unlike their older counterparts, are more embracing of cultural diversity. So a millennial Hispanic is more willing and comfortable being around by Asian-Americans and African-Americans and gay and lesbian people than their parents.” So, in order to really succeed, brands need to understand the millennial embrace of cultural diversity; in a sense, they need to become more diverse themselves.