1/28/2013 3:08 PM ET|
Bud dud: Beer isn't recession-proof
Craft beer may have thrived during the economic downturn -- but only after unemployment took a toll on big brewers.
We discovered this firsthand last week when some folks at the Beer Institute, a beer industry organization based in Washington, pointed out an alternative theory behind our post about how craft beer beat the recession. The Beer Institute found that craft's gains came at the cost of overall industry losses. As Beer Institute spokesman Chris Thorne put it, "Beer isn't recession proof."
"What you had was guys who build roads, hang drywall and deliver appliances out of work. These are guys who drink premium and premium light brands, because it’s affordable and that’s what middle class Americans drink,” Thorne says. "Meanwhile, Wall Street bankers, lobbyists and other well-paid professionals survived the Great Recession just fine, and continued to plunk down big bucks for high-end beer, thereby growing their share of market."
To illustrate that point, the Beer Institute provided a chart of average unemployment rates compared to average monthly beer shipments during the same period. Overall shipments began decreasing steadily in 2009 and continued through June of last year in direct correspondence with job numbers.
In 2011, the last full year for which numbers were available, the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau indicated that overall U.S. beer shipments decreased 1.4% after dropping 0.7% in 2010 and 1.9% in 2009. Anheuser-Busch InBev (BUD) and MolsonCoors (TAP), the nation's two largest brewers, each saw shipments slip 3%. Heineken shipments also fell 4%.
It's part of the reason Anheuser-Busch InBev pushed its premium Bud Light Platinum brand at the Super Bowl last year and is throwing weight behind its Budweiser Black Crown during the big game this year. It's also why A-B acquired craft label Goose Island last year and MolsonCoors continues to push premium brands like Blue Moon and Leinenkugel's.
Results have been mixed. Early indications from industry trade publication Beer Marketer's Insights show A-B with a 0.6% gain in 2012, thanks to both premium beers and a dwindling unemployment rate. Improved jobless numbers helped boost U.S. shipments 1.5% in 2012, based on preliminary figures, but it hasn't been an even recovery. Higher-paid college graduates have seen most of the benefits, while those with a high school education or less continue to lose ground. As a result, MolsonCoors' MillerCoors U.S. division saw shipments drop 1.8% last year as drinkers unsure about buying 30-packs of Miller or Coors in an unstable economy cut back.
Though the Beer Institute asserts that dividing brewers up into different categories only detracts from a thriving industry that boasts more brewers than at any time in U.S. history, beer spending patterns indicate that those fractures have already formed. Beer geeks can use whatever labels they want to describe it, but the only labels that matter are the ones on the beer cans and bottles each side of the unemployment divide can afford.
More on moneyNOW
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
While incompetent bosses like Michael Scott and Andy Bernard typically can’t survive in the workplace, office romances are a very real part of corporate culture.
- Southwest Airlines turns less legroom into $773M
- 'American Idol' gets sorry ratings for season finale
- Powerball's wacky sense of humor
- Millions of Facebook's users are actually pets
- Can crowd funding rescue the LA Times?
- Domino's debuts a DVD that smells like pizza
- Average US retirement age climbs to 61
- McDonald's aims to slim down its 145-item menu
- Bathroom reading goes digital with iPad TP stand
[BRIEFING.COM] The S&P 500 ended this week with a bang, roaring to a new all-time high on the back of stronger-than-expected economic data, influential leadership, and an ongoing appreciation for the Fed's monetary policy support.
The bullish bias was evident in premarket action as the S&P futures pointed to a higher start without the benefit of any definitive news catalyst. Stocks indeed benefited from a blast of buying interest at the opening bell on this ... More
More Market News
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.