E-Malt.com News article: 3975

Global beer sales continue to grow: This week’s panic reports of the demise of beer in the US and Germany add to those from many traditional beer drinking countries, but are just part of the trend for convergence across the world's markets, that will see global beer sales continue to grow, writes Kim Hunter Gordon, according to Beverage Daily report published on January 12.

It started with the US trade publication Beer Marketer's Insights that estimated that beer’s share of alcoholic drinks sold in the US dropped 3 per cent between 1995 and 2003. Then came the news that people in Germany are drinking more mineral water than they are beer. The Brits are drinking less beer in pubs, the Danish; even the Irish are losing are their tastes. But is this really a reason for beer executives to be looking worried?

Beer still remains by far the most popular alcoholic beverage in the US, but reaction to yesterday’s headline-grabbing estimate seemed to stimulate concern.

"The single biggest threat is that we will allow the American consumer to get bored with beer," said Miller president Norman Adami. "We believe there is an overall image crisis with beer," said Smith Barney Citicorp analyst Bonnie Herzog, “it has lost its 'sexiness'”. Anheuser-Busch, America’s largest brewer, announced a budget increase on promotions of 150 per cent.

The 3 per cent drop is easily attributable to, and rather modest in light of, the take-off in the US wine trade in recent years. In addition, the spirits industry spent almost $100 million on broadcast advertising in 2004, compared with "almost zero" in 1999, said the Washington-based, Distilled Spirits Council of the US.

Datamonitor analyst John Band explained that the situation in the US has a particular history. “Spirits have had a stigma and taboos derived from Prohibition that are beginning to disappear. They are becoming more acceptable and taking market away from beer.”

While this may have dented beer sales in the US, there is also, said Band, a global trend of convergence at play.

Sales are dropping in most traditional beer drinking (Northern European) countries at the expense of drinks such as wine. “Global beer sales are still on the rise. Russia and China are rising fast, as peoples’ incomes start to increase. Even European countries such as Italy are seeing growth – countries in which, historically, beer was never of importance.”

In turn, more wine is being sold in Northern European markets. Band expects drinks markets to continue to converge and beer to grow globally through emerging markets.

But, now that beer is on its guard, consumers in the US, Germany and other beer-consuming countries can expect a barrage of advertising from all camps in what could be a hard fought battle - but one that is unlikely to make a dent to the overriding global trend.


15 January, 2005