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Foaming It In: Beer Sales Getting Better

2:36 PM, Oct 1, 2013   |    comments
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Bruce Horovitz, USA TODAY

Hoist one for the brewski makers.

After several difficult years brought on by the recession and evolving consumer beer-drinking habits, the beer industry reversed its downward trend last year to post both volume and dollar sales gains in the U.S. market, says a just-released report from Technomic, the research specialist.

Even then, while that upward momentum continues in 2013, it is slowing, the report says.

It's been a tough slog for the beer industry in recent years as many Millennials and other adults have increasingly favored specialty wines and distilled spirits. Just as Millennial tastes in foods have evolved away from the pedestrian, so, too, have their tastes in alcoholic beverages.

"As consumer preferences evolve, the beer market landscape is changing," says Eric Schmidt, director or research at Technomic. Much of the industry momentum continues to come from imported and craft beers, flavored malt beverages and cider, he says.

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But craft beers - which typically have distinct flavor and are produced in smaller quantities - went ballistic. Craft beer sales grew a whopping 14.4% and now account for 6.3% of the beer category. And the category's jet-propelled growth is continuing in 2013, the report says.

Total beer volume increased 1.2% to 2.8 billion cases - driving retail sales up 3.5% to $62.3 billion in 2012, Technomic reports. By comparison, volume decreased 1.3% in 2011. The main drivers for the sales boost: growth in the super premium categories such as Blue Moon and in retro-hip brands like Pabst Blue Ribbon.

Perhaps just as important: the mainstream domestic beer category's rate of decline slowed in 2013, says Schmidt. Light beer remained the largest category and volume grew slightly as Bud Light was flat, Coors light grew and Bud Light Plantinum added 20,000 cases to the market, he says.

Some of that growth may have been fueled by increased ad spending by beer makers, says the report. Beer marketing spending in major media outlets grew 6.5% to $1.3 billion in 2012. Television accounted for more than two-thirds of the spending.

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At the same, time beer drinkers are:

• Opting for pricer beer. Super-premium domestic, craft, imported beer and cider categories together added 44.9 million cases to the market.

• Selecting more cider. The major beer makers continued diving into the category in 2013, including Heineken with Strongbow, Anheuser-Busch InBev with the rollout of its Stella Artoise Cidre and the debut of Mike's Hard Smashed Apple.

• Drinking more beer at restaurants. On-premise sales of beer grew 2.5% last year.

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