The Next Generation is Here — At Least Some of Them. Just Who are these New Nightlifers, and What Do They Want from You?

Generation X, numbering 44 million and aged 33 to 45, may have shaped the modern nightlife scene, but they were a mere foreshadowing of things to come. When you consider that the oldest of the Baby Boomers, which number 77 million, is now 64 years old, the great nocturnal spectrum of bars, clubs and lounges now belongs to a whole new crowd — one that takes its name from the recent turn of the millennium, and in whose collective hands the fortunes of many a food and beverage and entertainment entrepreneur depend.

Also known as Generation Y and the Echo Boomers, Millennials are generally considered those born between 1978 and 2000, and they are to the contemporary bar and club scene what their Boomer parents were to the previous good-time era. They have usurped their parents as the prime demographic that nightlife venue owners and operators must win over to be profitable and relevant in business now and in years to come.

What savvy operators will want to note is that this younger generation is only halfway here in the nightlife world, as a good portion of the Millennials are still below the legal drinking age. While X-ers were a force to be reckoned with in nightlife by their sheer numbers alone, the Millennial generation — in position to be predominant on-premise for at least the next two decades — may be even more of a prize for those in the hospitality trade who can tap into the wants, needs and desires of this new generation as they evolve.

According to Bruce Tulgan, founder of Rainmaker Thinking Inc. and author of Not Everyone Gets A Trophy: How To Manage Generation Y, the attention spirits purveyors and nightclub brands alike are focusing on Millennials is one of the few bright spots in the ongoing economic downturn.

By all accounts, Millennials love nightlife as much, if not more, than the highly sociable Gen X. And not only are they educated and appreciative of spirits and creative cocktailing, but Millennials also display a taste for fine wine as well as imported and craft beer. Indeed, this very Echo generation is driving the steady growth of the craft beer segment to high single digit rates annually in the past decade and raising the profile and the profit margins on wine by the glass and the bottle at the bar. Perhaps best of all, though, Millennials can be reached easily through mass — and therefore less cost-prohibitive — social marketing.

Reaching the Techies

Millennials have a clear and comprehensive understanding of technology, Tulgan asserts, and this has revolutionized communications and marketing strategies that were not even possible with Boomers in their heyday. And as a direct result, he concludes, Millennials are a much better bargain from a marketing cost standpoint.

“Technology has become more and more complex, but it’s also far easier to use. Social networking and other menu-driven, Internet-based technology allow multiple users to collaborate by using collaborative software. These technologies makes info tech easier to navigate,” Tulgan explains, noting that Millennials are extremely comfortable with these technologies and applications. Courting them via social networking and apps reaps big rewards for purveyors of food, drink and entertainment.

Arturo Gomez, president of Chicago’s Rockit Ranch Productions, uses social networking to reach the Millennial clientele of his Chicago venues: The Underground, two Rockit Bar & Grill locations and the upscale Sunda lounge/restaurant. “Facebook and Twitter have become the dominant means of marketing to [Millennials] at our venues, as are other online advertising avenues,” he says. “Let’s face it, this group is having a very difficult time finding work post-college, and they are spending more and more time looking for options on the Web.”
In a generational context, Tulgan says this prime bar- and club-going demographic tends to think short term. “They respond to brief, straight, simple messages that allow them to get more information.” The best way to appeal to them, he adds, is to convey a very clear value proposition. But, he warns, don’t force yourself into speaking their language. One of the quickest ways to turn off a member of this sophisticated, tech-savvy tribe ofbar/club patrons is to attempt to try too hard in relating to them and subsequently fall short.

It’s crucial for bars and nightclubs to cater to Millennials, as the Rockit Bar & Grill in Chicago does. The demographic totals about 78 million, many of whom are already of legal drinking age.

“Sometimes, folks make a big mistake in trying to imitate their shorthand text message style. In trying to copy the latest thing, you are in great danger of becoming the joke. You can put yourself behind the curve and become an object of ridicule,” Tulgan explains.

High-Quality Demands

For club owners today, Gomez says the technological astuteness Millennials possess can be something of a double-edged sword. “To a certain extent Millennials have always been adverse to bad service, but now, because of the communication that exists on social networks, they are not tolerating anything but the best.”

This makes it vital to give Millennials optimal, personalized service, not only because they demand (and deserve) it but because they will share their experiences — especially bad ones — quickly on the Internet via sites like Yelp and Chowhound, or even a nightclub’s own website chat feed.

Allowing them to personalize their own surroundings and party experience is paramount to success with this age group, Tulgan says. “To them, uniqueness is everything, so they want to customize anything and everything they can. Their attitude is, ‘While I am there, I want to be able to shape the space.’”

But personalizing the experience goes far beyond just moving around chairs and couches — it extends to creating an energetic atmosphere. Whether it’s his 4,000-square-foot, 300-person-capacity nightclub The Underground, or his 12,000- and 5,700-square-foot Rockit Bar & Grill locations in Chicago’s River North and Wrigleyville neighborhoods, Gomez says the brick and mortar design of his concepts are not nearly as important as the intangible elements in place.

“For us, the buildings are great designs, but they are physical shells. Anyone can construct that,” he says. “What sets us apart and appeals to Generation Y is the energy within the spaces.”

The Underground, a Chicago nightclub from Rockit Ranch Productions, packs younger patrons in the club through the assistance of social networking sites like Facebook and Twitter.

Rockit Ranch Productions’ direct approach in delivering an elevated experience includes everything from operating hours that conform to the lifestyle of Millennials to price sensitivity in staging weekend and special events. “We make sure that our sponsored events are free. Our strategy is to get bodies through the door with big-name DJs, and product launches for new sprits as well as new technologies. We try to keep it as dynamic as humanly possible. That is a necessity with a nightclub. It has to be continually evolving to stay exciting.”

Selling What Works

Mike Ginley, a spirits industry veteran and founder of Westport, Conn.-based Next Level Marketing, understands Millennials’ wants and needs in his role as a sales and marketing counselor to spirits brands such as SKYY, Jim Beam and Patrón.

His method to get to the core of this generation is through ongoing online consumer surveys. By studying the brands that skew high or low on the sales charts in a given setting, Ginley discerns if a venue is reaching the Millennial demographic or missing the target.

Millennials  are “all about discovering new spirits and cocktails. So, if you see one of their ‘discovery brands’ skewed lower, then you can assume that the venue is not bringing in the new, younger customers,” he says.

Because of their younger age and appearance than some other patrons in bars and nightclubs, Ginley notes that Millennials tend to gravitate to the spirits side of the beverage trilogy in order to appear a bit older and more sophisticated. True to character, at least before the most recent recession took hold, they generally would order the most expensive drink on the specialty cocktail menu when visiting a venue for the first time.

Yet Ginley says presuming Millennials are cost or status driven from such buying behavior is missing an important aspect of their collective makeup: “Millennials are trend and taste driven. Patrons in their 50s like to drink simple, non-flavored drinks, but Millennials are flavor centric.”

In particular, Millennials gravitate to the tequila, rum and vodka categories, Ginley says. “They don’t start out drinking Cognac.” For bar owners and managers, their unique taste palate is well served by flavored Martinis with elaborate garnishes. “It’s about flavor and color. Millennials have much broader preferences than Generation X-ers, and they are open to all of the innovative combinations of tastes and the different fusions going on behind the bar. Right now, it’s not enough to have one Margarita on a cocktail list. You really have to diversify. A good beverage menu needs four or five Margaritas, minimum.”

One example of brand success in connecting with Millennials of late is Sauza’s Hornitos Tequila, a brand that targets adults in their mid-20s to low 30s, according to the company. Ginley says Millennials have adopted this brand as one of their own because of its high-end taste and value. Other spirit categories, too, are bringing Millennials on board by adding a more contemporary spin to traditional brands. Red Stag by Jim Beam is a black cherry bourbon that is “right on trend,” Ginley says. “They took an older category and gave it a hipper image by infusing it with black cherry [flavor]. From a marketing standpoint, they teamed up with Kid Rock, who is promoting it at his concerts.”

In his 13 years in the nightclub, bar and restaurant trade, Gomez has watched Millennials come into their own as savvy consumers who set the pace in the on-premise industry in some ways yet mirror the tastes and preferences of Gen X-ers in others. “The younger demographic has been so informed by what Generation X has cultivated in nightlife. We created a movement that has left a lasting impression on how people want to party.” And keep in mind: The fact that they want to party and socialize is something that will stick, no matter what the generation. NCB

Our Heroes!

Spirits, wine and beer suppliers and marketers are all looking to Millennials as the generation that will resuscitate the on-premise drinks business in the next year or so. During the VIBE Conference in Las Vegas in March, executives from three industry associations pointed to the generation as the one to court.

Currently, 14.9 percent of the legal drinking age (LDA) population is in the sweet spot for beer – 21 to 27 years old – and numbers 29.4 million; as Millennials age and more come into LDA, the environment for beer on-premise should improve, according to Lester Jones, chief economist for the Beer Institute. “There’s a good demographic coming our way,” he noted.

In fact, an estimated 20 million Millennials have not yet reached LDA. That’s good news, given that consumers in their 20s appear to be developing sophisticated palates and beverage portfolios faster than previous generations.

John Gillespie, founding partner of Wine Partners, said Wine Market Council research shows 21 percent of LDA Millennials studied are “core” wine drinkers, meaning they drink wine at least once a week (on average); 21 percent of Gen Xers and 37 percent of Boomers are core wine drinkers. At this rate, Millennials may be a generation with a greater number of wine aficionados than its predecessors, Gillespie said. And that’s not to say wine snobs, but rather people who understand wine and enjoy a variety of wines as part of their regular imbibing habits.

On the spirits front, David Ozgo, senior vice president, economic and strategic analysis for the Distilled Spirits Council of U.S. (DISCUS), sees the on-premise market as key to future growth of the spirits industry. Millennials are indeed a crucial target audience for restaurants, bars and nightclubs. But consider that the generation is well-schooled in the ways of socializing in the “third place” — places other than home and work/school — thanks to Starbucks and fast-casual concepts such as Panera Bread that encourage lingering with free Wi-Fi and comfortable settings, and it’s obvious that Millennials will likely drive the on-premise drinks business for the foreseeable future.

“Happy days may soon be here again,” Ozgo quipped.

— Donna Hood Crecca