Are You “Trading Down?”

Apparently, that’s what Miller Brewing Company CEO, Tom Long, would like you to believe. He recently told reporters—those business reporters, who take sound bites from big breweries and turn them into headlines that make you go “Huh?”—that Americans are trading down—we’ll assume from craft beers—to economy beers, which are mainly light, yellow, fizzy lagers—like Miller products.

Why? Long explained, “We think it’s primarily driven by decline of disposable income and pocket money that American consumers are feeling right now.”

Dick Leinenkugel, vice president of Jacob Leinenkugel Brewing, a subsidiary of MillerCoors, also told Wisconsin reporters that “people have less disposable income … they’re prioritizing their spending on food and fuel, and spending less on going out to eat and drink.”

Sounds like everyone got the same memo.

Sorry, guys—while we dig a Leinie’s Red or High Life from time to time, we don’t buy that. Stop feeding the press these doom-and-gloom sound bites that only fuel the fire.

Of course, we can’t speak for everyone, but here on the East Coast, people are definitely going out. In fact, there’s an influx of new bars and brewpubs opening up to meet the growing demand for good beer and food. And it’s a fact that when the going gets tough, people go out and drink. Every bar and beer-centric restaurant owner we’ve talked to this year reports that their sales are up.

To boot, the Brewers Association reported that in 2007, craft beer volumes were up by 12 percent, dollar sales by 16 percent, and, most recently, that dollar sales were up 11 percent during the first six months of 2008—compared to the same time last year, which was 11-percent volume and 14-percent sales. Many craft brewers are experiencing double-, even triple-digit growth. Hell, many are having a difficult time keeping up with the demand.

Sure, comparatively speaking, the craft beer industry overall is a bit down from last year, but the year isn’t over yet; there are a ton of factors to consider, and the real world can’t be boiled down to a simple number.

So if Miller’s sales are up, craft brewers’ sales are up, and people are indeed going out to spend money on beer, what the hell is all of this “trading down” bullshit? Could this be in reaction to the success of craft brewers, and they’re not being considered part of the craft brewers’ club? Does it have anything do to with the failure of the Miller Lite Brewers Collection? Where’s the meat to back up such statements?

Guess who’s not a part of these statistics? You guessed it: Miller and Leinenkugel. They’re not considered “craft brewers” by the Brewers Association definition, which was specifically designed for statistical purposes.

Ironically, while both took hits here and there, Miller and Leinenkugel have also reported increased sales overall. So it’s beneficial for Miller to basically tell reporters that their increase in revenue is due to consumers struggling financially and having to downgrade their choice of beer to, say… a Miller or another so-called non-premium beer.

And maybe we’re just talking out of our proverbial asses, too. Anyway, are you downgrading your beer due to your current economic situation? Send us an email. We want to know.

And, Long, let’s do lunch. We’d love to hear more.

Respect Beer. ■