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Economy Kills Beer Consumption

bb-2Opening a brewery was the same thing as printing money. A little barley, some hops, water from a (wink, wink) secret source and you were in the chips. While it is still possible to make a living selling beer, the weak economy is killing beer consumption.

Many of the oldest U.S. beers are seeing a big sales slump. However, beer is still the most popular alcoholic beverage sold by volume, but tastes are changing. Part of this change is due to Generation X aging into legal drinking age and wanting something different from their Baby Boomer parents, but some of it has to do with the economy.

The volume of mass-produced beer has fallen every year since the recession hit as the economy kills beer consumption. Since 2001, America’s drinking beer is down a hardy 11 percent. Think of cheap beer sales as a health marker for the blue-collar middle class. When the recession struck, the hardest hit major industries were construction and manufacturing, which disproportionately employ blue-collar middle class guys. Sales of cheap beer collapsed.

The result was a steep decline in consumption for some brands that once were extraordinarily popular. Brands such as Michelob (down 72%) Budweiser Select (down 61%), and Old Milwaukee (down 53%), all have seen this decline with a major economics of beer change from the beginning of 2006 to the end of 2011.

So if the traditional labels have fallen so far, what are people drinking now? Lighter and low calorie beers are driving the change to a degree. Bud Light, once specialty suds from brewery behemoth Anheuser-Busch, has grown to be the Number One selling beer in America. But the rising tides of light beer (12% since 2006) aren’t the engine that’s driving sales in 2013.

In the last few years, heavier beers and craft beers (think Blue Moon) and microbreweries, respectively have posted double-digit growth even in the face of a recession. This has been the most important trend in this tough economy forcb-3 beer consumption. It explains why Anheuser-Busch bought Goose Island, used last year’s Super Bowl to launch Bud Light Platinum, and used this year’s Super Bowl to launch another heavy brew.

Bud Light might still be the most heavily-consumed beer in the country, but the country’s tastes are fleeing to higher-alcohol liquids. Liquor and wine consumption is up 20 percent since the turn of the century, and richer craft beers are leading the way.

Beer Marketer’s INSIGHTS executive editor Eric Shepard explained that it is specialty beers and craft beers — not light beer — that have eaten into sales of traditional full-calorie beer in the past year. He expects that to change through improved marketing techniques.

“I think that part of the reason that brewers felt we had three down years was primarily the economy but it was also a lack of innovation, and so now you’re seeing [the beer industry] rev up these things,” he said. “The buzzword for this year was innovation.”

So where the American beer drinker used to convey his order with one word (“Bud”) he’s much more likely to ask for a Hefeweizen or Belgian Ale in 2013.

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