Brewers' Dry Patch: Americans Turn From Beer to Harder Drinks

I suspect there will be many more articles describing the contraction of the mass market beer segment in the coming years.

As touched on in the article, when people want beer they are gravitating more and more to local and fresh. But plenty of young folks are skipping beer altogether in favor of craft cocktails and spirits with fewer calories.

 

This is such a bizarre way to frame this argument, and reminiscent of how the press talks about Apple v. Android when it comes to phones (where Apple is perpetually failing because the various Android makers offer phones to a much wider audience...despite the fact that Apple continues to make all the actual revenue).

From deep in the article:
"AB InBev said earnings before interest, taxes, depreciation and amortization—a crucial measure watched by analysts—rose 6.6% to $4.99 billion in the first quarter, topping analyst expectations for a 4.7% gain. The brewer said revenue increased 1.2% to $13.07 billion from $12.92 billion.

Not all big beer makers are struggling."

So volume is down...but revenue is up. Maybe the future doesn't hold the same volume level of light beer sales, but maybe that shouldn't be the measure of whether ABInBev are being "squeezed."

 

Everything goes in cycles. Maybe one day the big beer companies will be out of fashion completely. Founders, stone and sierra nevada will be considered the cheap, flavorless relics. The kids will be drinking beer made with labratory experiment hops that are melded genetically with fruit plants, aged in old tom gin barrels and served out of a 3d printed diamond chalice. The hipsters will dress as if they're homeless. (they're already on the way there) The lines at the hip new beer releases will be all drones with a milk crate hanging from them. The future is bleak, might as well switch to liquor now

 

Craft cocktail sales may be up at the same time Bud Light sales are down, but it seems a spurious correlation to suggest that the cheap 30 pack crowd has switched to $10+ cocktails.

 

Yeah, seeing that their profit is up... I'd say they're doing fine. I poked fun in my comment, big beer is gonna be fine. They may have to shrink to compete, but that's business.

 

As long as they can find buyers for more 'premium' beers like Michelob Ultra Pure Gold made with organic grain, and the higher per unit cost in the crafty segment, volume declines can be offset.

 

I agree. But my anecdotal experience here in Southern California suggests a surprising overlap between the two groups when it comes to occasional drinkers.

 

Hmmm.... 1.1 million gallons? (So, 35,484 bbl). Of Bud Light? That is down.

AB sold 35.2 million barrels of Bud Light in 2016. I don't think the authors of that article know the US beer market and just collected a bunch of figures from various sources without understanding them or knowing the difference between "million" and "billion".
And you can't blame it on the cite source, Euromonitor, which noted last year:

 

Everything goes in cycles and it really means nothing. Will beer/liquor be here in 100 years, I would bet on it just like it always has been.
Cheers

 

I wonder how much the improving economy over the last 9 yrs has an effect. Especially in that 20 something demographic they talked about. If you are doing better you move up to more expensive choices. Even without data I am pretty sure income level is a good predictor of Bud Light/Lite/Coors light consumption.

 

By then domestic robots will be doing our home brewing for us.

 

just so long as they don't acquire a taste for beer lol

 

I would think it's a better predictor if you are poor than if you are rich. If you are poor you don't have the option of spending more money. But if you're rich, it may not affect your beer taste buds.

I have seen a lot of older people at expensive restaurants or bars still drinking adjunct lager. And yet some of those same type of people would order a $80 bottle of wine or a $20 glass of scotch.

 

From the article:

“AB InBev has said it isn’t giving up on those mass-market brands, but is more focused on offering drinkers more choice and persuading them to buy more expensive beer. The company recently rolled out its higher-priced Michelob Ultra Pure Gold, made with organic grains. It is also now selling Bud Light Orange and a new version of its Bud Light Lime. Both are brewed with real citrus peels.

The Belgium-based brewer, which completed its $100-billion-plus purchase of rival SABMiller in 2016, has been squeezing costs and boosting margins. Its shift toward higher-end beers has also bolstered its bottom line. Despite the big drop in volumes, U.S. revenue per hectoliter rose 1.9% in the first quarter, thanks in part to sales of higher-priced beers.”

It would appear that ABI has a ‘strategy’ here? Set higher prices for certain products and hope that people buy those more highly priced products.

Cheers!

 

I for one, welcome our AIIPA overlords.

 

I have loved beer all of my life - but I am slowly returning to other drinks that I love and I've been all the happier for it.

The over the top response to the NEIPA was the catalyst, as all my local beer stores are bringing in every silver tall boy IPA at ($6.99 a pop....even for APAs) at the expense of six and twelve pack variety.

On the upside side, I forgot just how much I love gin, tequila and wine.

 

My recollection is that the economy didn't start coming out of the shitter until about 5-6 years ago.

 

Holy cow. I saw a reference to Michelob Ultra Pure Gold in another thread and 100% assumed the poster was making a joke! I'll be curious to see if it shows up in the fridge of a friend who drinks a lot of Ultra.

On the other hand, I'm totally down for trying Bud Light Orange. I actually kind of like BLL when it's hot enough out and I'm planning to drink something in a few sips.

 

You know what the 'Pure Gold" part of the name stands for? The answer: mo' money!

Cheers!