Innumerable headlines—both in business and consumer media—have chronicled the hard times of carbonated soft drinks and premium beer.
I’ve watched the numbers decline for years, but the force of the matter became frighteningly clear in December when three of the largest beverage makers in the world all announced major job cuts:
- Coca-Cola Co. to the tune of about 2,000 positions
- Anheuser-Busch an estimated “several hundred”
- PepsiCo an unconfirmed amount but what one newspaper called “the latest step in a long-running effort to trim costs”
In all three cases, the companies cite soft sales results as the reason. Both soda and beer have had difficulty in growing sales over the past two years, and the typical scapegoats are consumers’ desire for healthier products and consumers’ quest for more authentic flavors and tastes.
I can buy that, to an extent. Yes, consumer wants and needs are changing, but none of the above companies has been shy about promoting the investments they’ve made to address these issues, from buying budding brands to developing their own lines of better-for-you beverages. Still, sales continue to falter.
Instead, there’s another force at work here—distrust of big business. And much of it is coming from that new generation we’ve been hearing so much about: millennials.
I recently read that not only does this young and burgeoning demographic prefer to shop from the underdog, but they also want to work there.
We’re seeing it in the grocery stores where they shop—Whole Foods, Trader Joe’s, etc.—and their preferences in fast food, such as Chipotle over McDonald’s. It’s even evident in where they buy their electronics: Apple Store vs. Radio Shack or Best Buy.
This generation loves social media, texting and new technology, and prefers to work for businesses with fewer than 100 employees, according to research from online salary database PayScale.com.
Talk to the millennials with whom you work about their preferences. You’ll hear words such as “authenticity,” “local” and “altruistic” in their shopping preferences.
The challenge for billion-dollar companies is that no matter how much they drench their product promotions in those same terms, millennial consumers are weary enough to distrust it.
Are these companies doomed to die at the hands of an overeducated generation? Not by a long shot. But overcoming the prevailing winds is going to take more than a new color scheme or a rehash of the same old products and promotions.
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