Beer sales go bust this St. Patrick's Day
A 4% drop in pint orders and higher prices may signal worse luck ahead for brewers, which rely on March to start a seasonal upswing.
In a terrible sign for 2013 beer sales, Nation's Restaurant News and research firm GuestMetrics found that consumers ordered 4% less beer this St. Patrick's Day than they did in 2012. In financial terms, sales were flat from 2012 despite fewer orders, while sales of wine and liquor on St. Patrick's Day jumped 6%. That not only means fewer pints of Diageo's (DEO) Guinness, but it's bad news for Anheuser-Busch InBev (BUD), MolsonCoors (TAP) and the greater economy as well.
That small drop-off is a big deal for the beer industry, which relies on a bump in March sales to end a winter cold spell and start the buildup to peak summer sales. In the beer world, St. Patrick's Day comes at the end of what is typically a long, dry winter. According to the Brewers Almanac put together by lobbying group The Beer Institute, American beer drinkers go into hibernation around Labor Day and don't really emerge until it's time to buy Memorial Day party packs.
St. Patrick's Day and the NCAA men's basketball tournament are where beer's first green, hoppy shoots of spring first appear. In 2010, for example, Americans hit their peak beer consumption in June, when they knocked back more than 20.1 million barrels. They bought roughly 19.5 million barrels a month until the end of summer, but consumption trickled off every month thereafter. It was down to 15 million barrels each month in January and February of 2011.
By March and St. Patrick's Day, however, that shot up to 19.1 million again before settling back to 17 million in April just before the summer buying season.
Blame the end of the Social Security tax break, blame delayed tax returns, blame a lack of expendable income in general, but don't blame all beer drinkers for the slowdown. When orders are down but sales are flat, that means folks are spending a lot more on beer than they have in the past.
Craft beer made by small and regional brewers grew to more than 5.5% of U.S. beer sales by volume in 2011, but reached 9% of all beer sales by dollar amount, according to the Brewers Association craft beer group. That same year, overall beer shipments in the U.S. dropped 1.4%, according to Beer Marketer's Insights.
The Beer Institute's explanation for this is simple: Beer isn't recession-proof. While well-off drinkers splurged for pricier craft beers and imports, working-class types cut down on their 30 packs of Bud and Coors.
They haven't quite come back, either, as A-B InBev sales estimates for 2012 show a near-flat 0.6% uptick, while MolsonCoors suffered a 1.8% setback. Bud has tried wooing high-end drinkers by bumping up alcohol content in new offerings like Budweiser Black Crown. Miller, meanwhile, is going back to its beer commercial roots to plug its leaking sales.
Each could have used a little luck of the Irish this St. Patrick's Day. Apparently, that wasn't on tap.
The holiday fell on a Sunday. Really reading the market off a drinking holiday when people have to be at work the day after the holiday. Yeah that's smart.
DUI is what makes people drink less people.
cops are out with a hunger and were not to let them have afield day with us
The brewers now charge a lot more, but sell a little less. Their net earnings are still more than if they had sold greater volume of product for less money. Don't forget some of the retailers who will continuously add an extra nickel if their cost increases by only one cent.
Then there is "Tax man". He keeps getting more and more of our money, for doing less and less. His claim to fame is these are "Sin Taxes" which no one formally protests.
I like certain micro brews like Flying Dog, from Frederick, MD. A six pack of one variety at Martins/Giant Supermarket runs $10 to $11.. Wal-Mart sells the same item for $8+.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. 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 Morningstar Inc.
[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
More Market News
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'