Millennials are drinking wine instead of beer and the industry is freaking out

Millennials are increasingly moving away from beer in favor of wine and spirits.

This trend is scaring major companies like Anheuser-Busch, MillerCoors, and Heineken, according to a recent report by Morgan Stanley.

"Overall beer consumption trends remain weak, and it appears millennials are increasingly turning to other alcoholic beverages," the analysts write.

And many millennials who do drink beer prefer craft varieties to traditional pale lagers like Budweiser.

In fact, a recent Budweiser study found that 44% of drinkers aged 21 to 27 have never tried the brand, reports Tripp Mickle at The Wall Street Journal.

At the brand's peak in 1988, it was selling 50 million barrels of beer a year. That number has declined to 16 million barrels.

WSJ says that traditional beers have a reputation for being bland in taste.

Beer can also be difficult to keep cold, whereas wine and cocktails can be put on ice or drank at room temperature.

In order to attract younger customers, Anheuser-Busch has released spoofs on classic cocktails.

The Bud Light Mixxtails are canned and bottled versions of classic cocktails like the Hurricane and Long Island Iced Tea.

The brand also released Bud Light Ritas, which are flavored to taste like margaritas.

Morgan Stanley analysts are concerned that this strategy could backfire and Mixxtail and Rita customers will graduate to actual cocktails instead of buying to classic beers.

But Anheuser-Busch maintains the canned margaritas are a huge hit - especially with women.