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U.S. Beer Consumption Continues to Decline

Unemployment among beer's core consumers takes its toll

Say it ain't so!!

U.S. consumers are drinking less beer these days. Industry analysts say it's partly because of high unemployment rates among beer's traditional core consumers and the fact that Americans are drinking more wine and spirits.

The consumers who normally prefer beer can't afford to buy as much as they did in the past. The consumers who can afford it prefer to drink something else.

According to the recently released Beverage Information Group's 2012 Beer Handbook, the overall beer industry lost 35.6 million 2.25 gallon cases – a 1.3 percent decline – to end the year at 2.787 billion cases.

Exploring new beverages

The report found that consumers are leaving beer and gravitating to the wine and spirits industries with their new product offerings such as flavored vodkas, category-crossing whiskey liqueurs, sweet reds and high-end blends.

Meanwhile, the report suggests domestic beer saw declines due to its lack of innovation and ability to connect with consumers. With the largest segment, Light beer, losing 39.2 million 2.25-gallon cases, the other beer segments could not make up for the loss.

The Craft and Imported beer segments' continued success helped to offset some of the overall industries' declines, but could not fix the problem.

Americans prefer imports

According to the Beer Handbook, domestic brewers are being pressured by imports. Imported beer saw an increase of 1.3 percent in 2011 and is projected to climb. Consumers are increasingly drawn to imports due to the wide variety of high-end products available, as consumers are trading back up to more premium brands.

The growth in the Craft and Imported beer categories seen over the years is expected to continue, with Imports projected to grow at a slightly slower rate. It remains to be seen if they can offset the declines in the domestic categories.

"We are looking to the Craft segment to continue to spur growth in the beer industry," says Adam Rogers, senior analyst for the Beverage Information Group, Norwalk, Conn. "Consumer interest is at its peak and there is unlimited potential for growth as more craft brewers enter the marketplace."

Craft beer segment still growing

Craft beers, usually brewed in small quantities by "micro-brewers," have a similar appeal as a fine wine. They're generally favored by consumers who have disposable income.

In the past, however, the brewing industry has been carried by its mass-produced domestic brands whose consumers tend to be less discriminating and more value-conscious.

But high unemployment rates, economic uncertainty, rising commodity and fuel costs all affect beer pricing structure and the report suggests the effects are clearly visible in falling beer consumption.

Story provided by ConsumerAffairs.
Consumer Affairs

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