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.
Issue link: http://read.dmtmag.com/i/82861
EDITOR'S NOTE The Evolving Beer Market irst, let's be clear about one thing: beer is big business and the major domestic brands that retailers all know and love dominate the almost $95 billion a year industry. At the same time, we all know that overall beer con- sumption in the U.S. has been falling for several years now, with much of the decline taking place among the mainstream brands, while wine and spirits consumption has been rising. Percentage-wise, the losses in beer consumption have, for the most part, been modest – for example, total beer consumption in the U.S. fell 1.3% in 2011, according to the Beverage Information Group – but when talking such large numbers, that small decline represents about 36 million 2.25-gallon cases. That's a lot of beer. But the beer industry picture is anything but bleak, for there is a F tremendous amount of ferment bubbling up in the marketplace. While imported beers have seen recent gains, with consumption up 1.3% in 2011, the real excitement is being generated by a panoply of craft beers, many with just a local footprint, but an increasing number that claim regional distribution, while some more established brands are extending out nationally. In our annual beer industry overview cover story (see page 16), writer Gerry Khermouch astutely identifies "an increasing fragmentation of the U.S. beer industry, where premium and below-premium segments continue to struggle even as high-end options thrive and proliferate….It's an environment that few industry people argue is going to significantly reverse any time soon…and despite the challenges it brings, most retailers and wholesalers have come to embrace it as adding profit and excitement to a category that has struggled to reclaim drinking occasions from wine and spirits." Sr. Vice President and Group Publisher email: cforman@m2media360.com Editor-in-Chief Charles Forman Tel: 845-426-6072 Fax: 845-426-6423 email: rbrandes@m2media360.com Richard Brandes Tel: 212-353-3832 Fax: 212-353-8214 Managing Editor Jeremy Nedelka Harriet Lembeck F. Paul Pacult Robert Plotkin Michael Sherer Cheryl Ursin Contributing Editors Dan Berger Vice President of Sales, Associate Publisher Anthony Bongiovanni tbongiovanni@m2media360.com Senior Regional Sales Manager Mark Marcon mmarcon@m2media360.com Senior Regional Sales Manager Debbie Rittenberg drittenberg@m2media360.com Art Director Adam Lane Indeed, Jim Sabia, chief marketing officer, Crown Imports, notes, "Think back 15 years ago and the brand set of a consumer might have been a favorite and two others. Now, it's a favorite and five others." With the upcoming 75th Annual National Beer Wholesalers Association Convention taking place in early October in San Diego, writer Khermouch uses that county as a case in point. He writes, "These days San Diego County counts itself as home to more than 40 craft brewers, from local pioneers Karl Strauss and Pizza Port to Stone Brewing, which has built an international reputation and is even talking of opening a brewery in Europe. That's in a market where domestic premiums vie for supremacy with a broadening array of imports that includes even Aussie beers and those from Mexico's burgeoning craft scene across the border. It all makes for an unprecedented stew…." That same formula seems to be replicating itself across the U.S., certainly in large urban areas, but also in smaller cities, as the ferment in the marketplace offers a variety of product options never before seen in some communities. Right now, craft beers represent approximately 6.5% of the entire U.S. beer market, which is well beyond where most observers believed that segment would reach just a few years ago. And with a 14.1% growth rate last year, craft momentum is solid and promises even more growth, particularly as the major international brewers continue to enter the space, both as producers and distributors. "We could be entering a bit of a renaissance with beer," says UBS executive director and beverage analyst Kaumil Gajrawala. Here's hoping he has a crystal ball. Richard Brandes, Editor-in-Chief 6 • Beverage Dynamics • www.beveragedynamics.com • September/October 2012 Senior Research Analyst Adam Rogers List Rental Manager Cheryl Naughton RETAILER EDITORIAL ADVISORY BOARD Charles Bailes III ABC Fine Wine & Spirits, Orlando, FL Ralph Bondon Berbiglia's, Kansas City, MO David Breitstein Duke of Bourbon, Canoga Park, CA Jim Shpall Applejack Liquors, Wheat Ridge, CO Hal Gershman Happy Harry's Bottle Shop, Grand Forks, ND Charles Sonnenberg Frugal MacDoogal's, Nashville, TN Greg Wonsmos Centennial, Dallas, TX M2MEDIA360 President/CEO Marion Minor Vice President, Finance & Operations Gerald Winkel Senior Vice President, Audience Development Joanne Juda-Prainito Vice President, Operations and Human Resources Mary Jo Tomei Beverage Dynamics is published by The Beverage Information Group a division of M2MEDIA360 Ron Junge Brown Derby Stores, Springfield, MO Dan Manning Haskell's, Minneapolis, MN Burt Notarius Premier Liquors, Kemmore, NY Editorial and executive offices at 17 High St., 2nd Fl., Norwalk, CT 06851 Telephone: (203) 855-8499 Fax: (203) 855-9446 E-mail: rbrandes@m2media360.com