Opinions differ between economists, investors, and psychologists as to whether alcohol consumption is a cyclical or countercyclical good. The latest annual report from the Beverage Information Group suggests the Amerislump is taking a toll on the U.S. beer industry, but there are some interesting side effects:
The total volume of beer sold in the U.S. fell by
1.9% in 2010, according to data from the Beverage Information Group.
This compares with flat sales in 2008, at the height of the recession,
and a loss of 2.1% in 2009. However, unlike 2009, when overall figures
were dragged down by a big hit to the imported beer category, in 2010
import sales were positive, and weaker domestic beer sales accounted for
the negative total. Among the top-selling 10 domestic beers, seven
brands showed losses for the year. Every category of beer lost volume,
except for progressive adult beverages, craft and imports.
Domestic premium sales fell by 7.6%, better than
the 9% loss of the previous year, with the country's second best-selling
brand, Budweiser, taking the biggest volume hit with a decline of 8.0%.…
Sales of sub-premium or "popular" beers fell in
2010 by 4.1%, suggesting that losses in premium beer sales are not
generally being picked up by sub-premium alternatives. Major brands
suffered across the board, with the exception of Pabst Blue Ribbon,
which continued to ride its hipster credibility to a volume growth of
The imported beer category returned, barely, to
positive numbers after two years of negative growth. Losses in volume
sales by leaders Corona and Heineken were offset by the double-digit
growth enjoyed by Modelo Especial, Dos Equis, and Stella Artois. Those
three beers have little in common beyond the fact that they are brewed
outside the U.S., and they cultivate different audiences.
(Three weeks into the NFL season, I must say I don't find this all that surprising. Ads predicated on the notion that failure to drink domestic light beer may result in the loss of your "man card" do smack of desperation.)
It sounds like a classic decline story at first: big, traditional American brands floundering, imports surging. But let's remember that A-B InBev and SABMiller -- though they account for 80 percent of the U.S. beer market -- are multinational corporations based in Belgium and Britain, respectively. And let's take a look at the one part of the U.S. beer market that is doing well:
Unique among beer categories, craft beer has
enjoyed positive growth every year since 2003. In 2010, the category
returned to double-digit growth with a 12.6% increase (data from
SymphonyIRI Group (IRI), a Chicago-based market research firm). Boston
Beer's flagship Sam Adams Boston Lager gained 7.7% to 14 million 2.25
gallon cases, according to Beverage Information Group. Other growing
well-known craft brands include Sierra Nevada Pale Ale (up 9.0%) and New
Belgium's Fat Tire Amber ale (upa 15%). Indeed, 18 of the top 20 "craft
families" experienced positive growth (IRI).
See Matthew Yglesias for more on the role government deregulation played in creating the craft beer market, but the innovation of small beer producers isn't just good for the quality of American brews -- it's also spurring the big guys to make some changes as well: Blue Moon, Coors' imitation of a Belgian-style wheat beer, is among its most successful offerings, growing at 30.4 percent. The company has created a new specialty division specifically to compete with microbrews.
So like nearly every industry, beer's taking a hit from the recession, but it also seems like it's become more innovative and more "American" than it was before the crash. Also, apparently sales of Four Loko are down, so that's good news for everybody.
Update: Apprently, Google is now getting into the beer game as well.
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