Posted on 01/11/2005 9:16:33 PM PST by Mr. Mojo
ST. LOUIS - If you sometimes find yourself ordering a glass of wine or a mixed drink when you used to order a beer, you're not alone.
Wines and distilled spirits continue to gain a bigger share of the alcoholic beverage market, at the expense of the beer industry.
It's a trend that has been going on since the late 1990s and continued in 2004. Analysts who follow the alcoholic beverage industry don't see it stopping anytime soon.
"We believe there is an overall image crisis with beer," Smith Barney Citicorp analyst Bonnie Herzog said.
As baby boomers age, they are more willing to buy wine and spirits instead of beer. And the wine and spirit companies are successfully targeting younger drinkers with advertising and promotions.
"Our wholesaler contacts have told us through a survey we conducted recently that beer has lost its 'sexiness' and 'appeal to young consumers,'" Herzog said. "We continue to believe the road ahead is a long one for the beer industry."
Beer remains, by far, the most popular alcoholic beverage in the United States. But its share of the alcohol market has slipped.
Beer Marketer's Insights, a trade publication, estimates that beer accounted for 59.5 percent of the absolute alcohol content sold in its peak year, 1995. That had fallen to 56.7 percent in 2003.
The spirits industry began its big push in 1999, when it had 28.6 percent of the market. In 2003, its share had risen to 29.7 percent. Wine went from 12.6 percent to 13.6 percent.
The totals for 2004 aren't in, but it was "more of the same," said Benj Steinman, president of Beer Marketer's Insights.
The spirits industry spent almost $100 million on broadcast advertising in 2004, compared with "almost zero" in 1999, said Frank Coleman, a senior vice president at the Distilled Spirits Council of the U.S. in Washington.
August Busch IV, president of Anheuser-Busch Cos. brewing unit, has said that wine and spirits represent "a threat" to his company and the rest of the beer industry.
Miller Brewing Co. President Norman Adami said, "The single biggest threat facing the American beer business today is the possibility that we will allow the American consumer to get bored with beer."
So what are the brewers doing about it?
For one thing, they are spending more money on promotions, including what they call on-premise spending. That means mostly bars and restaurants, but also hotels, clubs, and concession stands.
On-premise sales, as opposed to store sales, account for only 25 percent of all beer volume in the United States, but 48 percent of all beer retail dollars, making it an important battleground.
Wine and spirits companies have promoted themselves aggressively in bars and restaurants, increasing their sales, Legg Mason analyst Mark Swartzberg said.
Anheuser-Busch, the brewer of Budweiser and Bud Light, has said it plans to spend an additional $30 million for on-premise promotions in fiscal 2005, a 150 percent increase.
Milwaukee-based Miller Brewing also has increased spending.
"Miller is spending about 40 percent more on advertising and promotion than 18 months ago," Swartzberg said.
And a little generational rebellion must be overcome, as well, Swartzberg said. Younger drinkers may choose wine and cocktails because their parents chose beer.
"Any given generation wants to be different than its parents," he said. "It's the natural ebb and flow."
I only drink the locally brewed microbeers or Guiness now and again. Bud and Miller have absolutely no taste.
Hmmm. I am a big fan of a good Belgian lambric, personally. I don't like beer in general. Give me a lambric or a Long Beach, if I'm going to drink something.
It seems there is no real middle ground between watery junk and motor oil.
As a young consumer, I find this hard to believe.
How can belching and excessive peeing be losing its appeal to the young ?
Try Sierra Nevada Pale Ale or a Belgian beer (like Chimay)... You might not like them, but they're certainly neither water (Pacifico) nor "motor oil" (Stone Russian Imperial Stout).
If you want a good drink, find a well made craft or micro brew, or a good, solid import like, say, Fuller's products from England. That adjunct-laden crap A/B, Miller and Coors put out is not beer.
Well, they sound like they might be worthy of a try, lol.
Is a Belgian beer similar to a lambric? I have only found it in one place (in Nebraska, if you can believe it) and have been looking all over for it since. Anything I've seen online refers to Belgian beer.
If I weren't quite certain that I mean lambric, I'd have to wonder if I were crazy, lol.
I rarely drink anything at all, but when I do, it's usually a porter or a stout.
Actually, I think for desert tomorrow night, I'm going to have a bottle of Youngs Double Chocolate Stout, and some Archway Dutch Cocoa cookies! No, I don't dunk them! And it's great with chocolate chip cookies as well!
"Cookies and Beer!" Yum!
Mark
I believe you mean lambic, not lambric.
I seem to recall having something by Fullers once, I think it was a "Creme Stout" maybe? It was OK, but I'm a big fan of Samual Smiths, especially their "Taddy Porter"
Mark
I'll bet this article isn't entirely accurate. I'm willing to believe that AB, Coors, and Miller are losing market share, but I'll give you dollars to donuts that at least half of that money is going to local microbrews.
Five years ago, I had a choice between Miller, Bud, and Old Style in most establishments in my area. If you wanted a 'premium' beer, you had Heinies or Becks.
Now I have at least half a dozen bars and restaurants within a couple of miles which give me a choice of at least 3 locally brewed products, a half a dozen micros from other states, as well as truly premium imports like Hacker Pschorr, or Stella Artois just to name a couple.
There are three separate pubs within 10 miles which serve nothing but 5 or 6 varieties of their own beers. You couldn't get a Bud Light there for love or money.
I know my beer purchases have gone down in the last year because we've begun brewing our own. With a minimal investment in equipment and a reasonable investment of ones time, you can brew in your own home beers that are vastly superior to anything that comes out of LaCrosse WI or St. Louis MO.
Just my two cents.
L
Sammy Smith's Taddy is good stuff alright, as is their Nut Brown Ale.
After making it to Munich a few years ago for Oktoberfest, it is pretty hard to ever "enjoy" beer in the U.S. again. :-)
Well, they should buy the necessary licenses from the Czechs; NENI PIVO YAKO PIVO - and Czech darks like Krusovice are the thing to behold and savor.
It took a while. My friends said the beer companies would go broke when I quit drinking in 1989...it's taken a while.
No, Ms Bonnie, there is an overall image crisis with beer drinkers.
An incredible brew. That and Paulaner are probably my two favorites. As you mentioned, it wasn't that long ago that most American beer drinkers thought Becks was a premium German brew. In fact, it's the Teutonic equivalent of Miller.
Don't worry beer companies... My HELP IS ON THE WAY... even as I speak.
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