Transcript Current Event - Beer Sales.ppt

US Beer Business Continues
Decline
Written by: James B. Anrndorfer, Adage.com
Presented by: Adrianne Johnson
A Shift From Beer to Spirits
• Beer sales down from 56% of alcoholic
beverage market in 1999 to 53.2% in
2004
• Spirits segment up from 28.2% to
31.3% of the market
Factors Driving Change
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Blurred image for beer brands
Distiller moves
Consumer affection for luxury goods
Decrease in blue collar jobs
Marketers Fighting Back
• More bar promotions
• Sweeter drinks – cocktails taking away
beer business
• Want to emphasize that beer is
“America’s favorite beverage”
• Brewer’s, however, cannot do much but
adjust
Generational Dynamics
• Baby boomers’ parents  wine/spirits
– Their kids  Beer
– New trend  Other way around
• Sprits most popular drink (40%) for 2127 year olds
• Stronger image with this group than
beer; 44.4% of males drank beer in Fall
2004, down from 48.8% in Fall 1999
• Increase of 5% sales in the top 25
spirits brands in 2004
Reversal of Expected Growth
• Publicly traded brewers hurt by decline in
sales
– Beer volume expected to grow less (0.50%) than
all alcoholic beverages (0.90%) annually for 2004 –
2009.
– Spirits growth 2.0%
– Wine growth 3.50%
• Reversal of what beer industry is accustomed
to
– 1970s – sales grew 3 to 4% annually
– Dominated through 1980s
– Didn’t see the spirits surge coming
Brand Differentiation Issues
• Humorous ads done by everyone
– No effort to differentiate each brand
– Advertised like water and soft drinks
– Only emulation of Anheuser-Busch ads
• Spirits marketers enter radio/cable in
early 1990s
– Marketing up 12% from 2003 to 2004
– Beer only up 7%
Societal Factors
• “Sex and the City”
– Make products more fun, mainstream
– Many consumers in different markets traded
up
– Appeals to women