• by Jimmy Flores , Maddie Marston , September 27, 2013

Despite the sluggish economy, the spirits industry poured on growth in 2012, and it’s no coincidence that the number of distilleries across the U.S. is continuing to rise. Instrumental in driving growth were small-batch bourbons, whiskeys and single malt Scotches, plus innovations in flavor (think Fireball Cinnamon Whiskey and dessert-inspired Pinnacle Whipped Vodka). Last year alone, 81 craft distillers launched in the U.S., bringing the total to 315, and some forecasters predict there will be as many as 1,000 small distillers nationwide by 2021.

Millennials are increasingly consuming craft spirits at the expense of big distributors. But why? We think four key attitudes are driving their interest: 

• Desire for Exclusivity
• Preference for Local 
• Longing for Nostalgia
• Appreciation for Process 

Small batch spirits, as part of their very nature, breed exclusivity—and for Millennials who prize "inclusive exclusivity," that is a very powerful draw. Being hard to find, but not inaccessible to those passionate enough to search, actually makes batch spirits more appealing. Millennials love that these spirits all come with a unique story about the brewer or process that they can share with their friends. BottleSociety.com capitalizes on this trend by making small batch products available for sampling and purchase anywhere in the country. Jim Beam Devil’s Cut is a great example of a mass distributor getting in on the trend by targeting the in-the-know consumer who wants something special and knows that in the aging process, you lose the “angel’s share” to evaporation.

Millennials are also hyper-conscious about where things come from. They take pride in supporting their local purveyors and in trying unique, home-grown cocktails when traveling. We’ve seen this affect their food and beer choices, and now we’re seeing refined and considered choices being made in the spirits category. The explosion of regional craft vodkas, like Woody Creek Distiller’s signature potato vodka made from three simple ingredients (Colorado potatoes, mountain spring water, and yeast) was a lead indicator of the success that small-batch whiskey and bourbon spirits are enjoying now. Golden Distillery’s dark spirits are a prime example of this. Its Samish Bay Single Malt Whiskey is made in small batches from a secret blending of Washington state malted barleys, and its apple brandy is made with local Jonagold apples. It’s worth noting that Millennials aren’t just driven by knowing a product is produced locally; they also want to know the origin and the story—the why behind it, and they enjoy visiting their local distillers to get the full experience. 

Cocktails with a heritage are seeing resurgence as well, as everything old is new again—from the Roaring Twenties all the way to the Mad Men era. Classic cocktails like the Old Fashioned, Rock and Rye, and the gimlet are exciting to Millennials because they have a history behind them. Millennials appreciate the legacy and simplicity of these drinks, and many have taken to perfecting these classics to serve as signature drinks at their own social occasions. Hochstadter's Slow and Low is seeing a lot of success right now with its ready-made cocktail inspired by traditional 19^th century Rock and Rye recipes.

One of the biggest draws to craft spirits and the cocktails produced with them is that no two drinks offer the same experience. Whether the bartender has a certain “secret” ingredient, or that speakeasy bar down the street gives off a cool vibe, or even if you are playing bartender at home, there is an undeniable appreciation for the process and the ceremony of it all. It’s the element of craft that gives every drink a hint of something special that often can’t be described; it can only be felt. Bottom line: Millennials know there is more to a good drink than just what is in the glass.

So what values are driving these trends? Millennials are constantly curating their identity and are motivated by authenticity, discovery, sharing and belonging. Feeling like an individual is essential, and they like having different go-to cocktails for every occasion. This is vital for a Millennial drinker’s confidence, and it can help them express their taste and sophistication level in a fun way. Ultimately, they know there’s no point to trying something if they can’t share it (as evidenced by the thousands of food and beverage pictures on Instagram). 

Personal affinity for adult beverages aside, there are larger implications on the rest of us as marketers (yes, even those of us who aren’t in the beverage space). Don’t be afraid to practice “inclusive exclusivity”: it is okay to produce something small-batch or limited-edition as long as it doesn’t feel off-limits financially or portray an air of arrogance to Millennials who are passionate about that category. Be willing to let consumers into the process. Reveal how you make your product, share the origin of the ingredients or parts, and be proud of where you do business. Millennials want that back story. Consider handing over the reins for some of your marketing to your Millennial consumers. Johnnie Walker recently handed over control of its Instagram account to amateur photographers, finding fame on the platform and empowering them to tell the brand’s story with much success. If Millennials are excited about your brand, then they are eager to help spread the brand love.