Beer Sales Continue to Fall But Craft Brews Keep Growing

Beer sales in the US continued their slow decline in 2010 with total consumption down -1.0% according to the latest beer industry statistics from The Brewers Association.   However, the real story is that the craft brew segment and the microbrews are forging strongly ahead with sales up +11%. Granted, the craft beer volumes don’t compare to the big brand names (accounting for only about 7% of total dollar sales), but this trend is certainly catching on in America.

Are we turning into a nation of “beer snobs”? I personally enjoy a great microbrew beer. The big national brands have a light and watery taste that, while refreshing, may be losing the interest of today’s beer drinker.
America is finding a new respect for the passionate local craft brewer. He or she offers their latest micro-batch to us in a local resto-pub atmosphere served up with wings and a sandwich, or if your lucky a nice dinner. It is the new local hangout – and as more consumers have a microbrewery in their town, they soon find themselves sitting among friends who share the love of unique tasting beer. There are quite few different tastes to sample - ranging from hoppy bitter concoctions to mellow amber lagers, and even a few fruit flavors to enjoy now that the weather is warm.

Microbrews and craft beers may keep the industry from losing ground as consumers continue to move from beer to wine consumption. The big beer players have been gobbling up microbrewery names and expanding them regionally and nationally with their efficient distribution infrastructure. These microbrew names fetch a much higher price at retail and can be profitable to produce and sell.

The branding of the microbrew experience, however, is still in its infancy stage. But just as a Starbucks rose from among the many local coffee houses of Seattle and turned the supermarket brand coffee world upside down, there will likely arise a microbrew player that brings the pub experience to a national stage and just maybe, ignites a mass trend that puts the growth back into the beer business.

 Article first published as Beer Sales Continue to Fall But Craft Brews Keep Growing on Technorati.

Do Brands Suffer in a Recession?

Actually, no.  Recessions rarely have a direct impact on the strength of a brand. 

A brand’s strength is measured in its ability to maintain its identity in the eye of the consumer and how uniquely it delivers on its promise.  That is different than how much product gets sold. Certainly a business can suffer from slower sales due to consumers choosing not to purchase as many things, or even to purchase only at the lowest price, but a brand is measured in its strength of persuasion and loyalty.

Brands suffer when what they stand for is lost – usually to a competitor who is doing a better job of delivering on the promise. 

Here is an example.  A recent article on the beer industry shows that Coors Light beer is vying to take the #1 spot of beer sales away from Bud Light, which has seen its share decline for a couple of years.  While the market is declining –3% per year, Coors Light is seeing sales increases.  Bud Light is a well loved brand but has become somewhat interchangeable with others and has lost some its bond with its user.  Beer are measured by their consumer as to taste and how they fit in with lifestyle and friendships.  Coors Light has turned up the innovation (labels show when they are icy cold), and continued to hammer home with strong ad campaigns.

But these gains and losses in this category have little to do with a recession. A recession may cause consumers to act differently, usually by, more closely,  watching what they buy.  But the brand that stays relevant and tied to the consumer, in the end, will win.