I was digging around for some beer sales data this morning, when one bit of information struck me. Now this is mostly speculation on my part, but I thought it was interesting enough to share.
According to the Beverage Information Group sales of domestic beers were down around 2.3% last year, and most analysts chalk this up to unemployment and the effects of the Great Recession on some people’s disposable income. I didn’t attend the Wharton School of Business – the tap selection at the local bars sucked, so I refused their scholarship 😉 – but I think this cause and effect is pretty obvious. What makes this information interesting to me is looking at where in the beer spectrum the sales decline is happening.
Last year’s 2.3% decline in sales was entirely at the expense of the big beer companies InBev, SABMiller, etc. Even as the economy has been in the dumps, sales of craft beer have been rising at a very healthy rate. So macro sales are down sharply and craft sales are up sharply.
What might this information say about which consumers are hurting most? Looking at these facts side by side, I have three guesses:
- The Working Class. My first guess is that folks with blue collars and limited disposable incomes are suffering hard during the recession. These folks are the traditional macro beer drinker (at least to my biased East Coast mind) and the dip in sales might reflect a dip in their ability to afford industrial lagers (thanks again for the term, Evan).
- Young Men. Another group who isn’t doing well are young people between the ages of 16 to 24, who have an unemployment rate roughly double that of the national average. Young men in the upper end of this age group represent a big chunk of the macro beer buyers, and if they aren’t making money, their beer funds are limited.
- Everybody. I know this is painting with a pretty broad brush, but I’m being realistic. Beer is America’s drink, and macro brews make up 95.1% of sales in this country. If mainstream America is hurting, beer sales are hurting. Sales of macro-lagers are very price sensitive, and last year’s price increases probably didn’t help here.
We’ve talked before about the craft beer bubble in terms of the industry’s growth being an unsustainable trend that will see a market correction, like the tech bubble or the housing bubble. But maybe we should see it differently, as a happy kind of bubble, one which insulates its occupants from the harsh realities of the world. A bubble-boy bubble. Fa-la-la-la-la.
While I’d like to think that the growth in the craft beer market is due to people from all walks of life discovering the wonders of good beer, it’s more likely driven by college-educated folks who still manage to generate disposable income in these hard economic times, and younger folks who have been lucky enough to find decent jobs. Again that’s speculation.
What I know for sure is that even though we can all talk about how we’ve personally suffered from the crappy economy, we should consider ourselves lucky to have such a wonderful selection of craft brews available and enough cash to scrape together to afford a taste.
Note: I updated the figures in this post after Zach Goldstein rightly pointed out in the comments below that I’m a moron.