July 4th is a big beer holiday
Independence Day is a time for family gatherings, patriotic parades, plus picnics, barbecues, ballgames—and beer.
The July 4th weekend is one of the peak periods for beer-drinking in America—as much as 40 percent higher than normal. Summer is also beer’s big season, with sales up more than 10 percent over the rest of the year.
But it’s getting harder for the major beer brands to boost sales in the U.S. market. Americans’ drinking habits are changing—shifting toward fancier, more expensive drinks—away from the standard Buds, Millers and Coors that many beer-drinkers are raised on in their early twenties.
At the Safeway Waterfront Blues Festival in Portland, Oregon this weekend, several beers were on sale for thirsty music-lovers: Deschutes Brewery of Bend, Oregon had two ales on tap, and there was also a craft brew from Miller. They were priced around $5-per-cup. Cheaper alcoholic offerings were available from Mike’s Hard Lemonade.
Waiting on line, festival-goer Tom Bothwell of Yakima, Washington riffed about beer and the blues: “In heaven there is no beer, that’s why we drink it here.”
Tawnya Bothwell had ordered a Deschutes Mirror Pond Ale. “I’m a regular beer drinker,” she said. “Once a week I have a beer on the weekend. Compared to my early twenties, I’m drinking much less. We like to drink the local beer when it’s available to us in restaurants, or if we just go the brewery.”
Graphic courtesy of the Brewers Association.
And therein lies the makings of a slow-rolling market crisis for the big breweries.
Beer drinkers are moving to craft beers—or, as they age, wine. That’s leaving the mass-produced beers like Bud and Miller behind. Beer production peaked in the U.S. in the 1990s and started declining. Sales have been down in four of the past five years.
But craft beer sales are up—nearly 20 percent in 2013. “There’s been a long, slow, and relatively moderate decline,” in the mainstream beer market, said Jim Hertel, a beverage analyst at consulting firm Willard Bishop. “The more popular and premium brands, the heavily-advertised brands, are in that decline.”
Hertel said craft beers are certainly more expensive. But they benefit what marketing pros call “badging,” a kind of cachet for spending more.
“If you’re out in a bar, perhaps you’re on a date trying to impress a girl,” said Hertel. “PBR is probably not what you want to be seen holding. It turns out that the craft beers have a little bit extra panache.”
During Beer Week at neighborhood pub Saraveza in Portland, Oregon, recently, Dave Dalisky was showing off summer beers from Flat Tail Brewing, the microbrewery he works for in Corvallis, Oregon.
“People that are younger, that are 21, 22, 23, are starting to get into craft beer,” said Dalisky. “Also what’s out there, what you can get at your local store, is a huge selection.”
Image courtesy of the Beer Institute.
Young people—especially young men—are still the biggest beer drinkers.
To try to hold onto them, the big multinational brewers are trying everything. Like rolling out their own smaller-run craft-brew varieties. Or creating new citrus brews, like Budweiser’s margarita-flavored beer on the market. And even introducting higher-alcohol beers, like Miller Fortune, marketed to be served in a glass on the rocks, like a cocktail.
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