Posts tagged with "Beer is especially down"

Beer here?

January 21, 2019

What will fans drink at baseball games next summer? Something tells us that fraternity boys are still buying kegs—but overall, Americans are increasingly laying off the booze; especially, the beer.

In response to the growing trend toward nonalcoholic drinks, the world’s biggest brewers and liquor companies are innovating beyond their traditional inventory and rolling out teas, energy drinks, and nonalcoholic spirits, The Wall Street Journal reports.

According to the Journal, new data show that U.S. alcohol volumes dropped 0.8% last year, slightly up from the 0.7% decline in 2017. Beer got hit the hardest, with volumes down 1.5% in 2018, compared with a 1.1% decline in 2017. Growth in wine and spirits slowed, as well, according to data compiled for the news outlet by drinks market analyst IWSR.

The fall in alcohol volumes reflects “a growing trend toward mindful drinking or complete abstinence, particularly among the Millennial cohort,” Brandy Rand, president of IWSR’s U.S. Region told the newspaper. Wine grew by 0.4%, down from 1% the year before; while spirits climbed 1.9%, compared with 2.2% in 2017. IWSR’s figures are based on products shipped.

And speaking of Millennials, could alcohol (and weed) vaping be a factor? While The Wall Street Journal doesn’t cover this game-changer in its report, the vaping industry is now a multi-billion dollar business, with teens and Millennials among the fastest-growing groups of users.  According to recent research by the FDA, over 1.3 million youths are vaping. 2017 saw the largest spike of any substance use in the United States in the past 50 years. E-cigarettes are now at epidemic level of use in the United States.  

In response to the changing marketplace and the growing disinterest in alcoholic drinks, producers are beginning to diversify:  Molson Coors Brewinghas turned to kombucha, Budweiser brewer Anheuser-Busch InBev  sells a spiked coconut water, and Smirnoff maker Diageo wants teetotalers to start mixing cocktails with a pricey, alcohol-free gin alternative, says the Journal.

IWSR forecasts low- and no-alcohol products in the U.S.—still a small slice of the market—to grow 32.1% between 2018 and 2022, triple the category’s growth over the past five years.

Industry executives say drinkers are increasingly concerned about health and that younger generations socialize differently from their parents, drinking less.

“Twenty years ago we didn’t have coffee shops open late, and pubs and bars open for coffee,” Ben Branson, CEO of nonalcoholic distilled spirit maker Seedlip (which is part owned by Diageo) told the news outlet. “People are favoring experiences over ‘let’s go drink on a night out.’”

AB InBev last year created a new global position, head of nonalcoholic beverages, to lead its efforts to diversify. Nonalcoholic drinks—including energy drinks and nonalcoholic beers—already make up more than 10% of the Bud brewer’s volumes. In 2017, it acquired San Francisco-based Hiball, a producer of organic energy drinks.

What’s more, says the Journal, AB InBev recently began selling Budweiser Prohibition brew—a nonalcoholic version of its flagship beer—in Columbus and Detroit. Nonalcoholic beer volumes nationwide. are expected to climb 9.3% over the next five years, according to research firm Euromonitor.

The beer company also has stepped up its efforts to woo consumers defecting to wine and cocktails. Its craft-style breweries in Oregon, California and New York have served as incubators for new, boozy versions of coconut water, matcha tea and agua fresca, a Mexican fruit-juice drink. And the brewer plans to later this month launch a spiked seltzer brand, Bon & Viv, which it will advertise alongside its beers at the Super Bowl.

“People are looking for something that tastes good but also allows them to live well,” Chelsea Phillips, head of marketing for AB InBev’s Beyond Beer division in the U.S., said in an interview with the Journal.

Research contact: saabira.chaudhuri@wsj.com