Status in a Bottle: A Fine Blend of Financial Therapy, Bourbon and Millennials
As cocktail culture takes the United States by storm, bourbon, a highly specialized version of whiskey, has become something of a millennial sweetheart. According to the Distilled Spirits Council, sales of American whiskey grew a staggering 8.1% in 2017.
So what’s behind this atmospheric growth? Can financial status explain why specialty bourbon Pappy Van Winkle has gained a cult following among bourbon aficionados? The new business elite — bankers, entrepreneurs, traders and second-generation wealthy – think nothing of dropping the almost $3000 a bottle of Pappy Van Winkle 23-year retails for. If one believes self-worth equals net worth, what could be better than having a bottle of Pappy on the table to make your bourbon-worshiping pals supremely jealous?
Financial therapists study financial behavior. They gain understanding of how people think, feel, and behave around money. For instance, many buying decisions are based upon underlying beliefs about money. Those beliefs can include the notion that more money, and more things – houses, cars, clothes, even bourbon – will improve one’s social status, and subsequently create more happiness. As such, it is not uncommon for a person’s self-image to drive purchasing decisions. Extravagant displays of wealth are a prime source of self-worth, social rank, and personal well-being, and the bourbon boom is surely a reflection of this buying behavior.
For a glimpse into today’s pop culture icons of wealth, Wall Street and greed, one only needs to watch Showtime’s mega hit, Billions. Whether celebrating a big hedge fund return, destroying an enemy, or seething over a run-away wife, the character titans of Wall Street are often shown cracking the seal of prestigious bourbon. Kavalan Whiskey, Michters Bourbon—clearly the spirit of choice for these psychologically complex and often wildly decadent characters. But are they any different from previous generations of whisky lovers? Mark Twain’s thoughts on whiskey: “Too much of anything is bad, but too much good whiskey is barely enough.”
The impact bourbon has and continues to have on our culture has been demonstrated throughout the ages. Understanding generational differences has major implications for consumer marketing, and the spirits industry is no different. Where hard-charging Baby Boomers (1946-1964) are driven by money and brand loyalty, Generation X (1965-1980) and Millennials (1979-2006) have different motivators. Marketers know that Millennials account for nearly a quarter of adults over 21 years of age, but they account for 32 percent of spirits consumption (Nielsen, 2015). They crave authenticity over brand loyalty, and constantly seek out new tastes. Millennials, and younger Gen Xers are often willing to pay a premium for experience, rather than just a product alone. They can be indulgent and will readily spend their money on new discoveries and luxury items. They want these experiences to be fun and rare – a little slice of they can share with their friends. There is a reason the term “extra” – code for extravagant or excessive behavior – has become a favorite term with this generation.
According to Nielsen’s 2015 Beverage Alcohol Media Report, millennials do seek deals, but they “won’t give up quality or taste when it comes to their alcoholic beverage purchases. And as a result, a large percentage say they will not spend their money on mass-market alcoholic beverages. That’s one factor that has led to the growing popularity of craft beverage alcohol products.” In addition, 41 percent say they associate a higher price with higher quality most or all of the time. Jeff Hopmayer, global industry expert from Brindiamo Group has witnessed the exponential growth. Jeff’s insights include “authenticity and discovery are really important to this millennial consumer. There is a strong desire to be educated and knowledgeable about what they are drinking and why.”
Though high-end legacy distilleries like High West Distillery in Park City Utah, or George Washington’s Distillery & Gristmill, Mount Vernon, Virginia still provide the craft and esteem these new bourbon buyers crave, newer businesses like Mythology in Denver, Colorado, and Willett Distilling Company in Bardstown, Kentucky bring new and exciting options that pair well with the rise of craft cocktail culture. Walk into any modern speakeasy in cities like New York, Chicago, San Francisco, even Denver, and you’ll find a variety of enticing options.
Millennial and co-founder of Mythology Distillery, Scott Yeates, knows what his generation craves. According to Scott “Millennials flock to adventure and unique spaces to explore a new world of spirits” driving the opening of his eclectic new space in one of Denver’s hippest neighborhoods. “The craft cocktail resurgence is further increasing consumer demand for craft spirits and we see an opportunity for distilleries to push creative boundaries in an approachable way.”
Very similar to how breweries innovated in the early 2000s, Mythology is a distillery with the goals of innovation, education and quality. This is in large part driven by the millennial generations interests in locally sourced and manufactured products, quality and creating a community experience.
A financial therapist may challenge a Millennial spending thousands of dollars on a bottle of bourbon. But to a young executive, the ability to spend that money, and in doing so offer his or her colleagues, clients and friends the unique experience that comes with it, is about much more. It’s a reflection on power, success, on the image he reflects to the world. To him, opening that bottle of bourbon is more than just pouring a drink, it’s crafting an experience, creating meaning where it might have otherwise have been missing. With a generic bottle of beer, a drink is just a drink. With Kentucky Owl bourbon however, that drink becomes an experience to remember.
Maureen Kelley is a private wealth manager and consultant. She has completed graduate studies in financial therapy and writes about current cultural trends in money and behavior.