The “King of Beers” no longer. Budweiser is no longer one of the top three best-selling beer brands in the U.S., according to a report released Tuesday.
Budweiser had been in the number one spot for decades, but it relinquished its crown to Bud Light in 2001. Coors Light knocked it out of the second spot in 2011.
Miller Lite has now taken over third place, relegating Budweiser to fourth. The trade publication Beer Marketer’s Insights has kept track of sales estimates since the mid-1970s.
While the news certainly isn’t good for Budweiser, it’s not great news for Miller Lite either. While Miller Lite has taken the third spot, its sales dipped in 2017 though they did not slip as far as Budweiser’s. In fact, all four of the top selling beers saw sales fall last year.
Bud Light’s shipping volume fell by 2 million barrels in 2017, which is the biggest yearly drop Beer Marketer’s Insights has recorded. Miller Lite’s shipments fell by “just” 375,000 barrels.
So what’s happening?
You can blame the decline of America’s beer giants on Millennials. Millennials are not only less likely to drink Budweiser and other major beers than the rest of the general population, they also consume less alcohol in general than the generations preceding them.
However, there’s a silver lining. When millennials do drink, they are more likely to choose a wine or liquor over beer. And the less well-known the label, the better.
“I think a lot of this has to do with millennials’ need for uniqueness,” says Dr. Jean Twenge, author of the book Generation Me. “Raised in a more individualistic time, they are interested in expressing themselves through personalized and unique purchases.”
Not only are millennials buying more obscure wines and liquors, they are also willing to pay more for them than previous generations. This is very good news for smaller liquor and wine companies.
One such company is Castle Brands (NYSEAMEX: ROX).
ROX is a micro-cap distiller and importer of high-end premium spirits, and is “one of the few small public companies in the global beverage alcohol industry,” according to the company’s website.
Just last week, the Bardstown Bourbon Company announced that Castle Brands had joined its Collaborative Distilling Program to produce custom small-batch bourbon and whiskey for ROX’s Jefferson’s Bourbon brand.
Considering the millennial generation’s penchant for unique liquors and wines—and their willingness to pay more for them,—Castle’s bet on expanding its Jefferson’s Bourbon brand with high-quality, small-batch bourbons and whiskeys may prove to be a wise move.