From family-focused restaurants to the taxi cab industry, millennials have been blamed for an extraordinary amount of industry disruption — and not without good reason.
As the globalized, gig-based economy continues to grow and technology develops, many industries are simply being left by the wayside. Being able to anticipate these changes are a hallmark of a good investor, as not only does it indicate which industries are on the way out, but also which industries are on the way in.
Here are six major industries millennials may be transforming into relics of the past:
#1. Domestic Beer
Large-scale beer corporations are being side-lined by craft beers and niche imports. This trend has grown dramatically over the last decade, and is leading to many microbreweries and brew houses being opened across the nation. In addition to this, millennials are now beginning to prefer spirits and wine to beer overall, and are drinking less as well. Investing in large beer companies may be unwise. Both Constellation Brands and the Boston Beer Company were downgraded in July by Goldman Sachs.
#2. Chain Restaurants
There’s been a strong drift away from chain restaurants and towards higher end, unique eateries and cafés. Chain restaurants are now being perceived as unhealthy and overly expensive, leading to many staples such as Applebee’s to strongly consider downsizing. What is increasing, however, are the number of “dining groups” and “food conglomerates” — restaurants that are a part of a larger corporation but still have their own unique menus, branding, and niche. This creates some of the benefits of a chain restaurant (such as shared resources) without the appearance of a chain.
#3. Designer Products
Designer bags, clothes, and furnishings are rapidly losing millennial interest, for two different reasons. First, millennials are now associating the high spending associated with luxury brands as irresponsible rather than sophisticated, which tilts them more towards reasonably priced wares. Second, millennials are also looking less towards popular brands as it is exclusivity that is desired. Rather than spending money on a large, popular brand such as Kate Spade, they would rather find a niche, boutique brand that is locally made by an artisan. Millennials have also become very savvy regarding deals, outlet stores, and sample sales, which is leading to a general devaluation of these luxury products.
#4. Movie Theaters
Cinemas are getting sidelined as millennials are now hesitating to pay the large costs associated with their tickets. Movie theaters also suspect it may be that millennials are hesitant to give up their technology for hours just to watch a movie on the big screen, especially when they can purchase the same movie later on in their home. Of course, less-than-legal means to enjoy a film are also readily available and easy to use. Rather than buying tickets, drinks, and popcorn, more millennials are engaging in streaming media and creating their own at-home entertainment centers. Dollar theaters are also doing business, and some theaters are courting the millennial audience by adding features such as drinks, full dinners, and the ability to text.
#5. Real Estate
Millennials have begun to enter the housing market, but they’re purchasing homes very differently from previous generations. Still burned from the 2008 housing scare, student debt and other economic woes, millennials are buying houses that are smaller, more convenient, and modern. Rather than the McMansions of yesteryear, they are being extremely conservative with their purchasing power. This is a good thing for those who want a stable real estate market, but it may not be a good thing for those who specialized in large, luxury homes, or the sprawling suburban developments that were popular a decade ago.
#6. Diamonds
Perhaps no industry has been as thoroughly destroyed by millennials as diamonds. The precious stones have been attacked from multiple fronts; “blood diamonds” are considered to be amoral and even synthetic diamonds are now considered to be a waste of money. A large information campaign dedicated to proving that diamonds are essentially worthless (and have been artificially limited in supply) has entered public consciousness, and fewer people are buying diamonds in general. A disinterest in marriage is further damaging the market.
While all these changes seem daunting, it’s important for investors to remember that millennials “killing” industries is not necessarily a bad thing. Rather, it’s a natural evolution and progression of the market.
More importantly, every market disruption has a tendency to create numerous opportunities. Rather than focusing on the negatives — industries that are spiraling downwards — investors should be looking to anticipate the industries that are going to be growing. Through this understanding, investors can find investments with solid fundamentals and the opportunity for tremendous growth.
Regards,
Ethan Warrick
Editor
Wealth Authority
