THE TREND ALWAYS WINS

Last week, we attended the annual meeting of the Florida Venue Management Association (“FVMA”). Our friends at The Oak View Group introduced us to the FVMA and facilitated our access to the three-day convention – thank you, Trent Merritt and Josh Epstein!

During one of the first working sessions, the Chief Venues Officer at a prominent Florida arena asked the room, “How are people engaging with guests in their 20s and early-30s?”. I was shocked when the first response was a suggestion that this VERY prominent, large venue (not Disney) look at generating additional revenues by selling hemp-based drinks!

I was shocked because I was not the person making this suggestion! 😉 And, after proclaiming this gospel for more than two years, I was very pleasantly surprised to hear others espouse it, and do so publicly!

Once the shock passed, I thought back to a report I had read that put forward stats substantiating this revenue-generating suggestion.

Declining Alcohol and Cigarette Use

The report noted that young adults have been cutting down on their use of cigarettes and alcohol, and this trend is expected to continue.

In a prior post, we discussed the health problems caused by alcohol and cigarettes, and how decreasing your alcohol consumption can really benefit your health and make you a nicer person.

These trends are well known to every convenience store, restaurant and mass assembly venue in the U.S. While unstated, we expect these trends were the basis for the FVMA question regarding engagement with 20- and 30-year old guests.

Whether it is because they are more health-conscious, more concerned about their youthful indiscretions being captured publicly on social media, or for other reasons, there is no doubt that Gen Z and Millennials are consuming tobacco and alcohol less than prior generations.

In an earlier report (April 2024), AGP made the more general comment that, “weekly alcohol incidence has started to fall over the last decade for the 21-25 age cohort, down over 7% since 2012 vs cannabis incidence increasing over 7.5%” They continued, “Similar trends can be seen for adults ages 26-34, however the decline in weekly alcohol incidence has only started in the past five years, which we believe is a dynamic of the age waterfall (as the adults ages 21-25 in 2012 age into the next cohort but continued similar consumption trends)”.

Combining these NSDUH numbers with the anecdotal insights from the FVMA meeting, we believe these trends of decreasing alcohol and tobacco consumption will continue for years to come.

While these trends are better for both society and to improve our individual health, from a commercial perspective, these trends represent a problem: how do restaurants, bars, and concert venues compensate for the lost revenue that results from decreasing consumption?

Rising Cannabinoid Use

An equally undeniable trend is the increased consumption of cannabis and hemp products. Diverging from the consumption patterns of their parents, young adults are increasingly consuming cannabis and hemp products, as shown in this chart below.

So, the overall trends support the proposed solution that venues, restaurants and bars can increase their revenues by offering hemp- and cannabis-derived products to their guests, particularly to the guests aged 21-34!

Further Evidence from our Enmarket Arena Pilot Project

Recently, we launched at the Enmarket Arena in Savannah, Georgia. We saw fewer fan incidents and no issues from patrons enjoying our beverages. It was also key that we out-sold all other non-alcoholic beverages offered at the Arena, even though we have a relatively unknown brand in a new product category, especially as compared to a couple of global behemoths.

This points to something bigger at play; consumers aren't just looking for non-alcoholic beverages, they are looking for true alcohol alternatives that can offer the hang without the hangover. So, again, our anecdotal and local experience supports the overall societal trends and numbers, except fortunately for us (and you!) the experiences and trends are positive and, dare we say, problem-solving!