Beer industry continues to suffer

Shipments are still sliding. The industry cites high unemployment, but what if that's wrong?

By Kim Peterson Oct 7, 2010 2:44PM
Beer © CorbisHey, a convention of beer distributors is in Chicago this week. That ought to be a good time, right?

Not this year. The beer industry is reeling as sales continue to slump, and none of the usual gimmicks and promotions are persuading people to drink more. Beer executives are groaning under the pressure.

"They're the worst trends we've ever seen," Benj Steinman, the president of Beer Marketer's Insights, told Advertising Age. Overall, beer shipments have dropped 2.1% in the first eight months of this year -- and that's on top of a miserable decline in 2009.

Five of the six top beer brands are down, Ad Age reports. The only brand with an increase, and it's a paltry 0.2% rise -- is Coors Light.

Executives seemed to pin the blame largely on the unemployment rate, particularly the dim job prospects for young males in blue-collar professions. "People drink when they come together," one distributor told Ad Age. "And they come together less when they are unemployed." Post continues after video:
As the recession wore on, the middle class spent far fewer dollars on beer. From 2007 to 2009, America's middle class cut spending on alcohol by 20.1%, The Wall Street Journal reported, citing data from the Labor Department.

Last year, middle-class households spent about $330 on alcohol, down from $413 in 2007, the Journal reported.

The largest beer brewers have been stable in these times, however, cutting costs to survive. But you can cut only so much. It's fine to blame the economy, up to a point. But some sectors are bouncing back, and still the beer industry suffers.

That's leading some people to ask a more worrisome question: What if beer sales don't recover along with the economy? What if there's a long-term decline?

There's one reason for the industry to be optimistic, however. Craft beers are hot and have been during the entire recession. The working theory is that even though people don't have much beer money, the dollars they do have are going to the good stuff.

The hottest craft beers right now, according to the Brewers Association, come from Sixpoint Craft Ales, Terrapin Beer Co. and Surly Brewing Co., Ad Age reports.

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