[T]here has generally not been much of a relationship between alcohol purchases and changes in GDP -- the correlation is essentially zero. Nor have alcohol purchases historically been any kind of lagging or leading indicator.These are Commerce Department data, and we don't have details about which segments aren't selling well (if you follow the link, the relevant line is 85). Nor is it broken down by region or state, so we don't know if it's a geographic finding, either. What we do know is that things really took off in the second quarter of 2007, hit a high a year later, plateaued for two quarters, and then in Q4, fell off the face of the earth. Aggregate sales have fallen back to a level they were at before the spike in '07.
But something was very, very different in the fourth quarter of 2008. Sales of alcohol for off-premises consumption were down by 9.3 percent from the previous quarter, according to the Commerce Department. This is absolutely unprecedented: the largest previous drop had been just 3.7 percent, between the third and fourth quarters of 1991.
Beer accounts for almost all of the decrease, with revenues off by almost 14 percent. Wine and spirits were much more stable, with sales volumes declining by 1.6 percent and 0.9 percent respectively.
Much more to learn, but this isn't a good sign.
All I have to say is: $10 six-packs, and $5 22-ouncers.
ReplyDeleteIt's almost as if price affects demand somehow. Hmmmm....
Didn't Dr Wort predict this about 2-3 months ago, when "beervana' was toting beer as "recession proof???"
ReplyDeleteAH yes! Here's some of those articles:
http://wortblog.blogspot.com/2008/11/sams-slumping-keystones-rising.html
http://wortblog.blogspot.com/2008/10/will-recession-bring-us-back-to-bull.html
OH.... and lets' not forget all the flack I got for this article!!!
http://wortblog.blogspot.com/2008/11/upright-brewing-new-brewery-or.html
Good luck finding the phrase "recession-proof" on this site. I do think Oregon craft breweries are in a different category than national brands, imports; or even micros in other states. What that means remains to be seen.
ReplyDeleteI don't feel like trolling through 3 months of beervana posts, but I remember the words, and I'm paraphrasing, 'I think craft beer is recession proof.' Check... It was either you or a commenter.
ReplyDeleteSo the Oregon beer bubble can't be touched or burst??
Are you Delusional or dreaming?
You are mistaken. I have verified this with the handy search feature. I will be gracious in receiving your apology.
ReplyDeleteHow is this bad. Alcohol causes all sorts of social ills. It should be taxed to be made outrageously expensive, then made illegal in public places, soon to be followed by making it illegal to drink your own home. And don't drink around kids or you'll get a ticket.
ReplyDeleteOh wait, that was smoking. Nevermind, I'm sure it would never happen to alcohol.
WAIT! Did you just say, "I do think Oregon craft breweries are in a different category than national brands, imports; or even micros in other states."
ReplyDeleteWHY???? Is there a magical golden beer ring of protection around the Oregon border? Are you Frodo and hold the magic ring? ;-}
You're stating that you think Oregon is in a different "Category?" Which category you don't say or even guess. Is this the mystery that we're all supposed to ponder? Is that vague or what?
In reading past Beervana Posts, it appears you are waiting for the hammer to fall at any time in the local beer industry.
Consider these past posts:
http://beervana.blogspot.com/2009/01/early-signs-to-watch.html#links
http://beervana.blogspot.com/2009/01/is-homebrewing-cheap-choice.html#links
http://beervana.blogspot.com/2008/09/bad-times-have-beer.html#links
"Signs to watch" You state, "The bad news: slightly more than half of you have already altered your drinking habits due to the recession.." Clearly, you see a recession SIGN coming?
"Homebrewing" You talk about the possible benefits of HOME BREWING vs. buying beer. I think that might imply the recession will affect our wallets and you even question home brewing vs. buying from local breweries... Interesting twist!
Again, you see a recession affect.
"Hard Times" posting. You quote stats from A Washington Post article that says MACRO and MICRO beer sales goes up during a recession.
Your glimmer or hope?
Then you stated in the Max Fanno article..
"It was only as I listened to the news of massive layoffs last week--including a thousand Oregonians Intel plans to lay off--that it dawned on me that we might be looking at the first signs of recession hitting the beer market."
So?! What side of the road do you want to drive? It appears that you see that there is or will be an affect of the local brewing market within this recession. SO, why will Oregon be in a "DIFFERENT CATEGORY?"
No one will be untouched by the recession! Oregon has been on shaky financial ground with high unemployment and a high low-income populous for years. Economic advancement has been staled by our local government in numerous absurd ways; i.e. the current possible new beer tax is just example of this states stupidity!
Oregon being affected differently is pure ignorance or delusion.... We may be hit "harder" than other states.
The Unemployed can't buy beer and those on fixed income will not be buying bottles of crappy Stumptown Tart Ale or other local SEASONAL beers.
Dr Wort predicted that the Liquor industry may see a rise in sales, purely based on the "more bang for a buck" concept! I know my local liquor store has been swamped per the owner and there current sales on 30-40% rise.
You thoughts?
Ralph, I think your scenario will happen to alcohol the moment science learns of cancer being transmitted second-hand and when the drinking population drops to 20%. Until then, I think your analogy is a wee melodramatic.
ReplyDeleteI say "wee" because it appears in the same thread with a Doc Wort hyperventilation, proof that everything's relative.
1. Doc, thanks for the apology. As promised, I accept it with grace. You're a sweetheart when you're wrong.
2. Oregon is in a different category for what I assumed to be obvious reasons. I'm happy to recount them for your benefit, however. I assume you don't dispute the difference between macro and micro. (If you do, you clearly haven't been following the performance of the two segments relative to each other.) So then we're talking the craft beer segments in Oregon and everywhere else. Oregon, where the vast majority of producers are draft-only breweries in a state that consumes at a minimum twice as much craft beer as other states. Will Oregon's craft market suffer identically with the rest of the country's? No one can say (though by all means do predict), but the differences are pretty well-documented.
3. You'll note, when you look through my archives, that I'm pretty wary about making predictions or bald assertions. It's because I allow the likelihood that I don't know everything. Or even, in some cases, much at all. In this way we differ: you are a man of certainty. Different strokes.
Jeff, who needs secondhand smoke when you have drunk driving? Alcohol causes many longer term illnesses.
ReplyDeleteCheck.
Thanks, Ralph. Your opinion is noted. Perhaps you'll find this more suitable reading material than Beervana.
ReplyDeleteCome on Jeff, just rattling your cage a bit after your support of the smoking ban. I'll off a link back at ya.
ReplyDeleteI'll go back to sipping on my homebrewed American Wheat.
Jeff,
ReplyDeleteYou have everybody giving ya S*IT today!
Looks like you're not biting on my last bit of gibberish... ;-}
Yes Jeff!! You are correct! You never used the words "Recession Proof." Please except my apology.
;-}
Well I was going to give him "SH*T" on thinking minorities with under 20% representation should have their interests ignored. I guess I should keep drinking to keep us out of the 20% rank, otherwise we be screwed.
ReplyDeleteJust some lively banter Jeff, don't take to heart.
Cheers!
In two minutes I'll be drinking Sierra Nevada's new Citra-hopped IPA. All is well in the universe.
ReplyDeleteEasy, Doc. You're one snarky comment away from a Stumptown Tart enema.
ReplyDeleteStumptown Enema!!!
ReplyDeleteYEA!!!!
I know it won't burn, there's to little acidic Belgian character to achieve a sting, but at least my rectum might smell like Marionnberries!!