Tuesday, January 26, 2010

The Business of Beer

It's tough times for a lot of folks; the economy has been sputtering for quite some time now. The President is scheduled to come on the tube this Wednesday and present his latest plan to lead us all out of our current Valley of Despair into the bright sunshine of the Promised Land. He will assure us that he knows not only what really went wrong, but also what should be done next.

I haven't heard the speech yet, but I suspect I will remain unconvinced...

So, given the rough last couple of years and the uncertain future before us, how is the beer industry fairing? Well, the Wall Street Journal had an interesting article on that very subject last Thursday, 1/21/2010. It discussed in sobering (ha, ha!) terms how the U.S. beer sales volume dropped by 2.2%, the highest rate of decline since the 1950's. The article focused on how the big brewers will need to cut costs and lower prices so they can increase the volume of their sales and make their recent expensive mergers pay off.

However, buried at the very end of the article was this sentence : "The small-batch "craft" beer industry continued to represent an industry bright spot, with the biggest among the craft brewers, Boston Beer Co., showing a 1.7% increase."

Check out the graphic above from that article and you'll see that the only two entities listed who increased their sales volumes were Boston Beer Company (brewers of the Sam Adams line of brews) and Yeungling, America's oldest brewery and one of the few survivors of the regional breweries that dotted America pre-Prohibition. In other words, the only two craft breweries big enough to make the list. Overall, craft breweries' sales are up 8.8%, in a down economy.

All this illustrates a trends which has been going on for several years. A growing number of Americans are no longer satisfied with drinking weak, pale, insipid lagers, served ice cold and promoted with slick ad campaigns that emphasize just about everything except what the beer tastes like. I'm not saying that Anheuser or MillerCoors are about to disappear anytime soon; let's face it, either one of them probably spill more beer in a year than the entire output of every craft brewery in the US combined. What I am saying is that the tastes of a significant portion of the American public are changing, and changing for the better.

Shifting the focus from the national to the local, whenever I chat with any of our local brewers, everyone seems to agree that their business is booming. People will pay a little extra for quality and freshness, things our local breweries, both here on the Peninsula and in various other location across Alaska, offer in spades.

Odds are, if you're reading this blog, you already know what I'm talking about. We may be drinking less, but by God we're drinking better. So give yourself a pat on the back and pour yourself a nice, locally produced craft beer to enjoy while you listen to the State of the Union speech tomorrow night.

Who can say who's helping America more: you buying a good, local craft beer or the guy on TV with his taxes, plans and policies.

My money's on you.

Until Next Time, Cheers!

1 comment:

Kassik's Kenai Brew Stop said...

Hi Bill,

Well done! I am sure I speak for all the craft brewers in the area when I say we appreciate the continued support of our community and craft beer drinkers across this great state. We all work very hard to promote the craft brew industry as a whole, because without each other there would be fewer choices, and fewer choices mean more of the big guys.

Thank you for betting locally.