Gen Z Drinking Habits Drain Profits from Local Breweries

Connor Brhely is a 21-year-old computer science major at the University of Wisconsin-Milwaukee, and despite being the golden age for drinking, he has no interest in alcohol. He grew up in a family of drinkers and saw how drinking has hurt the people around him.

“I don’t see the point in it,” said Brhely. “It’s done enough to damage my life, why have it directly affect me.”

In early 2024, a study by the market research firm NielsenIQ found that nearly half of Gen Z’s young adults over 21-years-old have never tried alcohol, and those that drink do so considerably less. They also found that Gen Z is less likely to choose beer as their drink of choice, preferring hard seltzers, flavored malt beverages and “ready-to-drinks” such as cocktails in a can and hard iced teas.

This change in taste is rapidly changing the brewing landscape, especially in Milwaukee. The Riverwest staple Company Brewing closed suddenly in late May, Enlightened Brewing in Bay View just announced they will be ceasing operation in January 2025 and Molson Coors has announced they will be closing the historic Leinenkugel’s breweries in Chippawa Falls and Milwaukee.

“A lot of us in the beer industry have thought that Milwaukee was a saturated market,” said Tim Eichinger, the co-owner and head brewer at Black Huskey Brewing, who says that more closures are coming.

Black Huskey’s sales have been flat since 2022, and they’ve had to cut costs to maintain profitability. Eichinger says the already saturated market is further hurt by the decline in sales. The lack of young consumers is becoming a large problem for breweries.

“It’s the same people but they’re older,” Eichinger said. “I don’t see a lot of younger people coming in.”

To stay afloat in the oversaturated market, breweries need to do more to attract young people, according to Eichinger.

Ron Hockersmith, director of beer and co-founder of Amorphic Brewing in Riverwest, has a different perspective on the change in consumer habits. He says the brewery scene in the suburbs is growing faster, drawing business away from Breweries in the cities. He says craft beer peaked in Milwaukee around 2019, but that the suburbs are experiencing peak craft beer right now.

“It’s like fashion, you know,” said Hockersmith. “Fashion hits the runway in Paris, like two years later everyone’s wearing it in New York, it takes like five more years for it to get here to Milwaukee and it gets to the burbs two years after that and so forth.”  

Hockersmith has seen the customers that used to come into the city for bar hopping with their families slowly stop coming in. Instead, they are going to different breweries and bars closer to home in the suburbs. To combat this, breweries must appeal to those who are still in the city, which is primarily young people. This often means serving more flamboyant drinks, like those found on Amorphic’s “WTF?” menu, which have relatively exotic ingredients for beer, like agave, vanilla and fruits. Another set of drinks that has proven popular with young people is THC Beverages, even if some brewers aren’t interested in them.

“I want to be good at beer because that’s what we like to make and what we’re passionate about,” said Hockersmith. “If the only way you can survive is to make THC beverages, I’m just going to close.”

While some brewers prefer to stick to their hops, others are trying to branch out. Indeed Brewing has added a range of sparkling THC drinks, Third Space Brewing now has a THC sparkling water called Head Space and Eichinger hopes to add his own THC drink to the menu at Black Huskey soon.

Hemp specialty stores already familiar with THC products have also invested in THC drinks. Kind Oasis is a CBD and THC shop in Milwaukee that added a range of THC seltzers to their shelves in June of 2023.

“They’ve quickly become our bestselling product in the store,” said Grant Steskal, the beverage manager at Kind Oasis.

When Kind Oasis started brewing their seltzer Steskal was delivering it to nearby venues with his prius. Now their drinks are distributed by Badger Liquor and can be found across Wisconsin.

“This is the mainstream now; it’s a category that’s probably around 10% of somebodies ring on any given day,” Steskal said.