Beer shipments in the U.S. slipped an estimated 1.4%, or 2.9 million barrels, from 2010 to 2011, according to recent newsletter published by Beer Marketer’s Insights.
Of course it was the Big Boys who took the hit, with Anheuser-Busch InBev shipments slipping 2.9% and MillerCoors seeing shipments fall 3%. Imports didn’t fare any better, as shipments of Guinness fell 2.4% and Heineken dropped 3.9%.
Those are some pretty significant drops, and a sign that beer in general may be falling out of favor in the United States.
According to BMI, the American beer industry must take action, and apparently they’re quite serious about it, because they broke out their marketing-speak handbooks:
“Big brewers need to regain drinking occasions taken by spirits over the last decade, especially among Millennials,” the group wrote in a recent blog post. “Consumers continue to face [a] plethora of new beverage choices.”
Oh those Millennials and their plethora of beverage choices for their drinking occasions! What’s a brewer to do?
Well, they could start by brewing better beer, like Sam Adams, whose shipments were up 8%, and Yeungling, who gained a whopping 16.9% in shipments over the past year. This certainly doesn’t make up for the loss in overall sales volume beer has been experiencing, but it does show a trend towards things “better” than macro beers.
I can’t help but wonder if the rise of craft beer is hurting overall sales volume of The World’s Greatest Beverage. I’m totally speculating here (rare, I know), but perhaps as “Millennials” ( A.K.A people born in the 80’s) have been introduced to craft beer, it’s made them realize that macro beers aren’t worth drinking. Because craft beers aren’t as widely available as macro lagers, people are skipping beer altogether and choosing distilled spirits or wine. In this way, craft beer is actually hurting beer sales, as it’s opening people’s eyes to the fact that the majority of beer available in American isn’t very good.
Certainly it sucks to see beer losing traction in the U.S. marketplace, but it’s also good to see Americans looking for something more interesting than light industrial lagers. We’ll have to see what happens to these numbers as craft beer continues to rise in popularity and, perhaps more importantly, availability.
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Beer & Whiskey Brothers 
awww did da poor big brew boys lose a wittle bi-ness. Perhaps they should pour a bourbon and think about it?
That’s EXACTLY how we got into this mess, John!
What exactly constitutes a “shipment”? Could the drop be related to the increase in purchases of beer from local breweries which would take away from big beer but not be taken into account in shipment statistics? Or, were the newsletter’s statistics broad enough to include any/all forms of distribution?
It’s all forms of distribution, measured in barrels. A drop this large can’t be accounted for by a shift to craft beer – people are drinking less beer in general, and are switching to spirits and wine.
Why couldn’t craft beers be responsible for a huge drop? Back when I was in San Diego, I could buy tons of local beers that didn’t travel more than 10 to 20 miles from their place of origin. I’ve had to move around a lot over the last few years, and I’ve been drinking local beers from Portland ME, Boston, Memphis, San Diego, San Francisco, Napa, Albuquerque (Marble is excellent, FYI), Harrisburg PA (Troegs is also excellent), and a bunch of other places. Since some of these places work out their own local distribution (or have no distribution at all, in some cases), I could easily imagine a 1% drop in total shipments. Is it really so crazy that an extra 1 out of 100 times, somebody would go fill up a growler or grab a keg of local brew for a wedding?
Plus, craft beers hit with a double-whammy: they are more expensive but also typically higher in alcohol content. So then, consumers could spend the same amount of money (and get equally drunk), while reducing overall shipments (which are based basically on the volume of the beer transported).
It could also be due in part to a convergence of these factors and the “buy local” movement, i.e., why should someone in NJ buy a beer shipped from St. Louis, when (s)he can get a better beer brewed closer to home that didn’t cost $$ to ship?
Big beer does need to be aware of these trends & do something positive about them. One thing it is doing is buying-up/investing in micro-brewing. If it can constrain itself to distributing these brews w/in their local areas & allowing the brewers to do what they do best, they can make some of their losses up. But I have faith that the big-business mentality will assert itself at some point & they’ll return to their centralized, bean-counting, economy-of-scale mentality. Its almost a given.
Another thing they could do, as you said, is turn their current production facilities over to quality brewing, but that’s even less likely, as it would require a change in the corporate power base, whereby the brewing mavens would have the last word over the CFO’s/bean-counters. In other words, they’d have to emphasize quality over quantity, and customer base over investors.
But ya never know, one or more of them might wise up before they go under.
I think we’re seeing something seismic happening here for sure, and I think it may have an effect on what happens in the C-suites of the big boys…
Could the drop in volume of macro beers be contributed to the fact that most macro beers are “light” beers with lower %ABV compared to most microbeers which tend to have not only higher %ABV but are usually more filling, leading beer drinkers to drink less in volume? One can look at the shelves in the store and see that almost all macro beers are available in 24-packs whereas most micro beers are sold in 6-packs and/or bombers.
I thought about that, too, but as craft beer only represents about 5% of all beer sales in the U.S., I don’t think that can account for such a large drop in volume sales…
Is there an updated infograph showing a comparison of beer sales ($) vs beer volume (bbl) for 2011 yet?
Crappy beer is falling out of favor and that’s a good thing. You know what’s not good? Hop crops increased from 2010, but are still down from 2009 production levels. The shortage drives prices up and forces breweries to reformulate their recipes to feature different hops either due to availability or price. Jim, I know you’re a stat junkie so here is the link: http://www.usahops.org/graphics/File/Statistics/National%20Hop%20Report-NASS%2012-11.pdf
Oh, and Go Niners!!!! (I bet a similar chart showing whiskey consumption in Idaho would show it went through the roof on Sunday due to a single resident)
Interesting data – looks like Bud will be okay, with Wilemette hops production casting a pretty large shadow.
And I think you’re right about the whiskey spike. Now the resident in question is a diehard Giants Fan, at least through Sunday afternoon. I’m stoked to see a Giants/Niners NFC Championship game. It reminds me of the early 90’s when they’d always butt heads in the playoffs.
I’m sure the big three control their own hop farms so I doubt they’re in any trouble. The hop shortages really hurt the small craft breweries. They also hurt us lowly home brewers. Simcoe and Amarillo has been almost impossible to find. When a store posts some in stock it sells out in minutes.
I was out with a girlfriend (she’s 28) last week who said she never liked beer until she had craft beer. She didn’t know beer could taste good. She stuck to cocktails and wine until visiting my house and trying a Founders Cerise. I think Millenials have been conditioned to drink locally and care about what they buy. Hello, Whole Foods!
More, better, and more better choices are the three reasons I can think of as to why beer shipments are down. Living in a college town, I’ve noticed more and more of the kids are trying something other than industrial, rice-adjunct lager. I see it in the stores as they peruse the “fancy beer” and at bars where the kids are trying a variety of brews as opposed to the same thing over and over. And they’re all interested in what we drink. A bunch of the kids around here started reading my blogs for the music posts, but now they’re starting to interact with and try craft beer. Corporate swill can tank for all I care.
I think that’s called illegal distribution to minors.
Jim,
I think your speculations are right on the mark (or at least not far from it). I’d be interested to see a demographic breakout of the numbers. I’d expect to see the greatest stability in sales/consumption in the older age brackets – that’s the population that’s had the most exposure to the mind-numbing (albeit effective) marketing of the industrial swillionares.
@TheAlemonger
I don’t know.. When I stop in to the two bottle shops in my little pop. 20,000 town, I see more and more craft beers. Stores are adding sliding door coolers in every corner to accommodate the additional craft beer volume. Even my dad’s (age 68) fridge has turned over from MGD to Spotted Cow & Lakefront. I like Lucky Town’s theory, I can’t tell you the last time I bought a 24 pack of anything.