Beer Sales Down

Nate Silver at Five Thirty Eight. com has a nifty chart showing how beer sales have fallen drastically, in his article Beer is No Longer Recession Proof.

But something was very, very different in the fourth quarter of 2008. Sales of alcohol for off-premises consumption were down by 9.3 percent from the previous quarter, according to the Commerce Department. This is absolutely unprecedented: the largest previous drop had been just 3.7 percent, between the third and fourth quarters of 1991.

Beer accounts for almost all of the decrease, with revenues off by almost 14 percent. Wine and spirits were much more stable, with sales volumes declining by 1.6 percent and 0.9 percent respectively.

Nate wonders if we have substituted cheap foreign(Bud, Coors, Miller are all foreign owned) beers for good wholesome American beer. It turns out real American beer drinkers are still drinking microbrews.

Americans may be cutting back their expenses to weather the turbulent economy, but they’re still drinking their craft beer.

As most other business segments contend with negative growth, craft beer makers - small, independent and traditional brewers that produce less than 2 million barrels per year - are enjoying slowed but still-strong sales increases and outperforming the beer industry as a whole.

While craft brewers have seen slowdowns in the volume of their beer consumed at restaurants and bars, business has picked up at the packies as more people spend their free time at home to save money.

Massachusetts-based brewers such as Boston Beer Co., Harpoon Brewery and Cisco Brewers say they’re also benefiting from consumers trading down to their brews from more expensive wines and liquor.

“In boom times, we might be envying our friends in financial services, but they’re now envying us,” said Dan Kenary, cofounder and president of Harpoon Brewery in Boston. “Beer is a staple. You might not be able to go out and spend $75 on dinner, but you can go out and spend $8 or $9 on a six-pack.”

Craft brewers saw a 5 percent volume increase in barrel shipments to 9.5 million in 2008, following two years of 12 percent jumps, according to industry publication Beer Marketers Insights. Imported beer, meanwhile was down about 2.5 percent last year, and the overall domestic industry was up 1.1 percent.

Boston Beer the largest American brewery expects sales to increase this year too. Founder Jim Koch, “I expect the economy will (stink), and people will continue drinking good beer.”