Slate: Beer losing market share to wine

[cdh]

Slate quotes Lew Bryson extensively on the slide beer's been experiencing in the marketplace lately. It seems the attraction of connoiseurship is bringing people to wine, and the low-brow market niche the megabrewers have carved for themselves is starting to feel a bit constrained.

There is a great big world of beers out there, but the industrial manufacture of absolutely consistent and unchallenging product has become beer's identity in the market. Can craft brewing pick up some of this slack and head off a mass defection to wine?

Lots of beers outclass wines in terms of tradition and backstory... and flavor and complexity as well. How do we get the mass market to notice and stop expecting beer to be bland yellow fizz with a trucker hat attitude?

http://www.slate.com/id/2167292/nav/tap1/

[eje]

cdh,

I can't really pretend to understand the marketing strategies of the larger brewers; but, to me their complaints sound a bit like those of the recording industry.

As far as I can tell, there is more good beer available in the US now than there has been at any point in the past 20 years.

In the last few years many of my friends have started brewing.

Are the sales of small to medium size brewers flat? I know Full Sail, Rogue, Deschutes, and Stone Brewing continue to expand.

Even in cardboard cutout mall-ville, there is a BJ's brewpub next to almost every Target I see.

Maybe Miller and Corona are losing out to wine and cocktails.

Is that something to lose sleep over?

[JohnL]

This is a pretty awful piece (usually Slate does a much better job). To their credit Slate indicates that that 2005 study is contradicted by the 2006 version (via the link)

wherein people prefer beer over wine.

The whole beverage and food industry is evolving in this country so it is no wonder there is a bit of concern and angst.

Eje makes some good points.

[cdh]

Maybe Miller and Corona are losing out to wine and cocktails.

Is that something to lose sleep over?

←

If the market is making the jump from Bud and Miller to Yellow Tail and Red Bicyclette, then yes, I think it is something to lose sleep over. People deciding that they don't like beer because they don't like Coors is a loss to all brewers of a potential customer.

[eje]

Things I am more concerned with:

Big brewing companies making like big chocolate companies, and gobbling up the smaller local brewers, in the hopes of cashing in on their cache.

Big brewing companies releasing beers branded as if they are micro-brews and diluting the small beer market.

Continuing popularity of Alco-Pops. I would prefer young people start with sweeter beers, and actually start acquiring a taste for the flavors of beer, rather than these alcohol and caffeine infused sugar bombs.

It occurs to me, that anyone who starts out drinking Alco-Pops, is going to be more likely to move to cocktails or wine, than beer. Maybe, the big companies are victims of their own success!

[JohnL]

Right now there are more choices in both domestically brewed beers as well as imported beers available on retailer shelves than ever before.

The same goes for wine.

So what is the problem?

[eje]

If the market is making the jump from Bud and Miller to Yellow Tail and Red Bicyclette, then yes, I think it is something to lose sleep over.  People deciding that they don't like beer because they don't like Coors is a loss to all brewers of a potential customer.

←

I dunno.

A lot of people make bad choices when they are first starting out to drink beer (wine, or liquor).

When I was in high school (drinking age was 18) I'll admit to being inordinately and inexplicably fond of Mickey's Big Mouth.

Not to mention the time in college when I was supposed to buy a bottle of white Bordeaux wine to go with dinner and got a bottle of Sauternes. Now that was a party!

Neither of those factors prevented me from later developing an appreciation for better beer or more appropriate wine.

What impact do you think will flat or depressed mass market beer brands have on the specialty brewers?

Will it impact the ability of brewery start ups and small brewers to get business loans? Things like that?

[cdh]

Will it impact the ability of brewery start ups and small brewers to get business loans?  Things like that?

←

Bingo. When research indicates that markets are shrinking, money to expand into them tends to dry up.

What needs to happen is a split between the yellow fizz market and the craft beer market... but how do you go about doing so.

[Kent D]

Well, speaking for myself, I'm drinking just as much beer as I always have, in addition to adding wine to my repetoire. Yes, I'm only one man, but I'm doing the best I can to keep market share up.

[JohnL]

The piece indicates that the beer market has been flat. Not declining.

In fact, the 2006 version of that infamous 2005 study shows drinkers back to prefering beer.

(the link in the Slate piece).

I would note that recently Compass Box (Scotch) was "introduced" into a dramatically declining category (brown liquors) cluttered with many brands and has achieved a lot of success--the stuff sells out easily.

There is hope for anyone with a quality product no matter the market conditions.

The beer market overall is changing and evolving--some segments may be declining---but I doubt there is a bleak future for any brewer who is in tune with those changes!

[Rich Pawlak]

And I thought, based on all of the coverage that I have read, that craft brewing sales were up significantly.

Having read the Slate piece, it is an awfully written, poorly extrapolated piece of journalism, depsite the prescence of Bryson. I''d be curious if he was quoted properly. doesn't sound like the Lew Bryson that I read everyday at www.lewbryson.com.

[aschbren]

And I thought, based on all of the coverage that I have read, that craft brewing sales were up significantly. 

Having read the Slate piece, it is an awfully written, poorly extrapolated piece of journalism, depsite the prescence of Bryson.  I''d be  curious if he was quoted properly.  doesn't sound like the Lew Bryson that I read everyday at www.lewbryson.com.

←

The beer market as a whole has been flat since the '80s because there's no room for it to grow.

The craft beer sector has been growing within that flat market share. As a result, the big brewing companies are scared to hell because they have no where to go but down. This is also why they are (perhaps) insidiously buying out craft or otherwise independent breweries (i.e. Redhook, Leinenkugels, etc.).

[BeerGut]

Wonder about who has the money to inform, educate and sway the audience.

Who controls image, advertising and distribution (including what doesn't get distributed).

There isn't a sense of history and tradition in the big companies, or the buyers.

Educate a friend in the difference between a Coors and Flying Fish and they might see the light. Bring a Rauchbier to a BBQ and see who wakes up.

It's a "just a give the people what they want" mind-set at the business end.

Some people put lime in their beer? Some people add salt? Fine, lets make a beer like that. If the Big Guys weren't buying/and the controlling the little ones there might be more experimentation and creativity. As it is we are about to have major advertising for beers like Salt and Lime Coors.

Another angle is the financial sense it makes to buy your competition, gut his operation and use the hardware to produce more of your own product (See: Rolling Rock closes and Bud takes over plant)

A good product will find an audience, but a good product with marketing support will do better.

Go drink a Duvel and get back to me.

[jesskidden]

Another angle is the financial sense it makes to buy your competition, gut his operation and use the hardware to produce more of your own product (See: Rolling Rock closes and Bud takes over plant)

←

I'm no lover of A-B and macros in general (have been boycotting 'em for over 35 years now) but that ain't what happened to Rolling Rock. InBev, the giant international brewing conglomerate and the owner of Rolling Rock since the early 90's (they got it when they bought RR's owner, Canadian brewer Labatt which bought RR in the late 80's) had no interest in a US "popular priced" brand. They sold the brand name to Anheuser Busch (which had enough spare capacity to fit it into a slot between Bud and Busch). A-B had no interest in such a small, inefficient brewery compared to it's own massive brewing factories.

Sooon after the InBev-A-B Rolling Rock sale, the Latrobe facility was sold to City Brewery of Lacrosse, WI (which makes a lot of contract brews & soft drinks and some local mid-West brands of it's own). Since Boston (Samuel Adams) Brewing Co. still depends on contract brewers for a lot of it's beers, they recently signed a contract to help City upgrade the brewery so it can brew Sam Adams' brands. At this point, Miller is still forced to fulfill it's contract with BBC for some of it's beer, but that contract is up soon and Miller has previously tried to get out it (after closing some it's breweries on the West Coast).

Edited July 14, 2007 by jesskidden (log)

[BeerGut]

I stand corrected. Thanks for filling in the pieces!

[Mikeb19]

I don't know about that...

In the last few years I've seen more great beers than ever (even some of the large-ish breweries are making good products), and the micro-breweries seem to keep on multiplying and getting bigger... Brewpubs also seem to be doing very well.

Up here in Canada, the beverage of choice is without any doubt beer. We drink a ton of it. And I see more and more people my age (22) drinking better and better brews...

Good beer is much cheaper to enjoy than good wine (all the best wines I've had in my lifetime I couldn't come close to affording - I had them at restaurants I worked at...). And honestly, I enjoy beer much more than wine (although I do like wine quite a bit).

Just this last weekend I stopped by a brewpub and had a tasting of 6 different, house-made brews. The difference in flavours, and complexity of each was quite amazing, and most were very enjoyable.

I think the future of beer (the world's first alcoholic beverage dating back to the 7th millenium BC, and thought by some archaeologists as being the catalyst for all of civilisation to develop...) is quite bright indeed...

[AshleyUNOB]

I think our role as beer fans is to educate people whenever we can. I still cringe when I see people carrying a case of crappy beer to the checkout, but I'm not going to accost somebody who's already made their choice. I have in the past seen people dithering at the beer fridge, staring in wonder at all the brands they've never tried before and intervened there. I also make a point of taking better beers to people's BBQ and, when I need to give a thank-you gift to an acquaintance (such as our mechanics), I buy a sampler from one of the lesser-drunk brands.

Who knows if it makes a difference?

We try to promote good beer at the UNOB and I have plans for a North America-wide promotion in September. Watch this space!