From the post-prohibition period to about 1980, you have an expected incline for a country on the move. (We went from 150 million to 226 million.) But then note the trend, even while the country continued to grow (roughly 310 million now) thereafter, when the total beer US market stayed right around 200 million barrels. How is it possible? We started to drink less:
That's a little bit bad if you're a brewer in the US, but not terrible. As long as people keep coming, you can at least hold firm. Except that you can't. Since 1980, purveyors of beer have gotten quite a bit more numerous. Behold what happens when you take into account the effect of imports and craft breweries*. Then the number for the mass market beers looks a whole lot worse.
In the years I've been writing about beer, Anheuser-Busch has managed to sell about half the beer in America, and I think they're still doing that, more or less. But you can see from these figures that they're only able to do it by cannibalizing or absorbing other mass market brands. Imports now constitute nearly 28 million barrels--14% of the market--and most of that is stuff like Pacifico and Corona, which helps explain why AB InBev was so keen to snap up Modelo. The amount of mass-market American lager has now dipped to about 150 million barrels--the amount they were selling 40 years ago when there were 85 million fewer Americans. If the trajectory continues, that segment could well fall below 100 million barrels in the next forty.
Interesting times, no?
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*These are a bit hard to estimate. The Brewers Almanac gives good numbers on imports, but doesn't parse out "craft beer." I've used Brewers Association members, which are exact, and added an estimate of extra-craft beers like Blue Moon and Shock Top and those breweries the BA has ejected from their membership roles (though I've probably low-balled it).
I don't know if it's possible, but I would *LOVE* to see similar charts, but organized two ways:
ReplyDelete1) ABV
2) Revenue
Obviously craft beer tends to run at a higher price point and (usually) higher ABV than the bulk of the macro lagers.
So I wonder the extent to which this higher ABV cancels out some of the drop in barrels produced. Are we drinking as much alcohol in our beer despite consuming fewer ounces [barrels] per year?
Likewise, are we spending as much on beer as a nation? Knowing if total revenue is increasing or decreasing gives you a different look at how much America is moving towards or away from beer compared to other alcoholic beverages. If barrels produced is decreasing but revenue is up, one could argue that Americans aren't really turning away from beer...
SNORE!
ReplyDeleteBrad, your revenue point is a very important one. The six-pack prices I posted yesterday illustrate that brewers have reached the bottom of their ability to lower prices and goose sales. With the bigger profits in craft beer (something like 50% more profitable than mass-market beer), it's a key trend to watch.
ReplyDeleteThe ABV thing is probably not affecting things in the aggregate. An overwhelming majority of the beer sold in America is still around the 5% of mass market lagers. If you look at what has begun to replace them, a big part is mass-market lagers from other countries (5%). Even in the craft segment, most of the beer is around that strength; best-sellers include SN Pale, Boston Lager, Blue Moon, Fat Tire, and so on. The percentage of beers above, say 5.5% couldn't amount to more than about 2-3% of the entire beer market. That can't possibly account for the substantial per-capita drop. (Though it certainly has in the Alworth household. One 8% beer and I'm done for the night.)
That might have been slightly confusing. The mass market lagers from other countries aren't 5% of the total market, they're 5% beers. They are actually around 12-13% of the market. Domestic mass market lagers are another 75% of the market, and the percentage of the craft segment that is 5% ABV beer probably another 10% of the total market. Or something. You get the point.
ReplyDeleteWe obviously aren't drinking less. It's just that wine, cider and spirits have consumed some of beer's market share. Demos have hurt beer, I think, since the 80s.
ReplyDeleteI'd like to see an overlay comparing Oregon's market to what you've created, particularly the last graph. Where do the lines (macro vs imports and craft) theoretically cross? I realize it's a rhetorical point, but it would be interesting...and I know I don't have time to do it. I bet our numbers are different...ABV numbers would surely be somewhat skewed by the amount of draft we drink.
Instructive post.