Beverage Dynamics

Beverage Dynamics Sept-Oct 2011

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

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In a still fragile economy, and with wine and spirits continuing to make inroads with traditional beer drinkers, brewers are using a range of targeted marketing and promotional initiatives, as well as a wide choice of beers to appeal to consumers. I By Julie Johnson f we ever had any doubts about the identity of the classic beer drinker, we don't any more. Beer enjoys popularity across a broad spectrum of adult consumers, but the heart and soul of the beer market is, we now see, the guy the economic recovery has left behind. Dave Peacock, president of Anheuser-Busch, is blunt: "Clearly the economy has had a major impact. We've seen volumes in a lot of industries impacted: ours may be disproportionate because the median household income for our average consumer is around $50,000 a year. That's pretty low, relative to other categories." Young adults are hit particularly hard says Craig Purser, president of the National Beer Wholesaler's Association (NBWA). "The thing is not to just focus on unemployment, but on 21- to 35-year-old male unemployment, which is disproportionate, followed closely by underemployment. It goes to sectors of the U.S. economy, like housing, like construction; those industries where beer drinkers tend to work. You can blame the weather if you want to, but the real funda- mental is unemployment." Peacock speaks for Anheuser-Busch, but he might as well be speaking for the industry as a whole when he says, "You have these factors affecting our economy. Like any company, we're having to say, OK, we can't control this. How do we manage our business and how JULIE JOHNSON is the editor of All About Beer Magazine. are we successful in this environment?" Strategies vary. For the big brewers, give core audiences plenty of choice, so there is a beer to fit any wallet: this includes forays into the high end, as well as budget brands. Connect with beer drinkers through meaningful promotions; that way, brands can maintain market share, even when volumes are down. Look to smart marketing to move smaller brands or reach spe- cialized audiences. Provide variety and excitement to stem the defection to other alcohol beverages. And wait for the economy to turn around. By the Numbers T he total volume of beer sold in the U.S. fell by 1.9% in 2010, according to data from the Beverage Information Group. This compares with flat sales in 2008, at the height of the recession, and a loss of 2.1% in 2009. However, unlike 2009, when overall figures were dragged down by a big hit to the imported beer catego- ry, in 2010 import sales were positive, and weaker domes- tic beer sales accounted for the negative total. Among the top-selling 10 domestic beers, seven brands showed loss- es for the year. Every category of beer lost volume, except for progressive adult beverages, craft and imports. Domestic premium sales fell by 7.6%, better than the 9% loss of the previous year, with the country's second best-selling brand, Budweiser, taking the biggest volume hit with a decline of 8.0%. As ever, light beers — whether sub-premium, pre- mium or superpremium — dominated American 38 • Beverage Dynamics • www.beveragedynamics.com • September/October 2011

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