Millennials are increasingly shifting away from beer in favor of wine and spirits.
This tendency is scaring major companies like Anheuser-Busch, MillerCoors, and Heineken, according to a recent report by Morgan Stanley.
“Totally beer consumption trends remain weak, and it appears millennials are increasingly turning to other alcoholic beverages,” the analysts write.
And many millennials who do drink beer prefer craft varieties to traditional pale lagers like Budweiser.
In fact, a recent Budweiser study found 44% of drinkers aged 21 to 27 have never tried the brand, reports Tripp Mickle at The Wall Street Journal.
At the brand’s peak in 1988, it was selling 50 million barrels of beer a year. That number has declined to 16 million barrels.
The Journal says traditional beers have a reputation for being bland in taste. Beer could also be difficult to keep cold, whereas wine and cocktails can be put on ice or drank at room temperature.
So as to attract younger customers, Anheuser-Busch has released spoofs on classic cocktails.
The Bud Light Mixxtails are canned and bottled versions of classic cocktails as the Hurricane and Long Island Iced Tea.
The brand also released Bud Light Ritas, which are flavored to taste like margaritas.
Morgan Stanley analysts are concerned this strategy can backfire and Mixxtail and Rita customers will graduate to actual cocktails instead of buying classic beers.
But Anheuser-Busch maintains the canned margaritas are a huge hit — especially with women.