BEER BOUNCES BACK . . . A BIT

Talk about an ironic twist of fate. After experiencing several years of disappointing sales, big brewers can thank the craft beer industry for helping them get back on track. According to the Beer Institute, shipments rose 1.9% to 141.4 million barrels in the first eight months of 2O12 after falling three straight years. Sales had decreased 1.5% in 2O11. Much of the rebound is being driven by small-batch craft brewers, reflecting shifting tastes and forcing Anheuser-Busch InBev and MillerCoors to increasingly borrow from the “little guy” playbooks. They’re also rolling out alternative malt beverages after liquor companies swiped drinkers. In addition, Americans are drinking more beer even though brewers increased prices through the recession, unlike wine and liquor companies.

For multiple reasons, beer has struggled in recent years. One of the big factors has been because its key customers, blue-collar males in their 2Os, were the most impacted by the economic downturn that impacted industries such as construction. An interesting correlation can be found when looking at beer sales in North Dakota, where an energy-sector boom is fueling a large boost in blue-collar jobs. The state’s overall unemployment rate is 3%, the lowest in the country. Beer shipments in North Dakota are up 18% through August. MillerCoors is posting healthy numbers for its biggest-selling brand, Coors Light and for the first time in four years, shipments of AB InBev’s Bud Light are rising, lifted by the launch of Bud Light Platinum and Bud Light Lime-A-Rita to compete against liquor.

But it is the craft segment that is really fueling growth as Americans branch out from traditional American lagers to interesting ales, porters and wheat beers from fast-growing small brewers. The number of breweries in the US topped 2OOO earlier this year and another 13OO are in planning stages, according to the Brewers Association. Craft beer sales rose 12% in volume terms to 6 million barrels in the first half of 2O12. The association estimated craft beer represented 6% of US beer market by volume and 9% in dollar terms last year. The move to craft-style beers could limit consumption even though it lifts profits in the $1OO billion beer industry. In addition to charging higher prices, many specialty brews have a heavier taste and higher alcohol content than mainstream beers, making them more likely to be sipped as opposed to chugged. So significant is craft growth that big brewers have decided if you can’t beat ‘em, join ‘em. Anheuser-Busch’s Goose Island and Shock Top are both posting double-digit growth as are MillerCoors’ Blue Moon and Leinenkugel’s. They say that imitation is the sincerest form of flattery!