WTF beer?!!

[valkyrie]

Here's an article I just read in the paper. Thoughts?

Beer's grip slips as tastes shift
Boomers, twentysomethings defect from foamy ranks
By Margaret Webb Pressler
The Washington Post
DenverPost.com

When a huge consumer products company starts slipping in sales or market share, even just a little bit, it can be a sign of a much bigger problem. And that explains why beer executives are on the offensive these days.

Though beer is still the most-quaffed alcoholic beverage in the country by far, it is slowly losing its grip around the marketplace edges: among new drinkers, among aging baby boomers and among other Americans whose tastes are gradually becoming more sophisticated.

More and more, when people kick back with friends and enjoy a drink, they're not choosing beer.

From 1998 through last year, beer's share of all alcohol servings slipped from 59.6 percent to 58.1 percent, according to Adams Beverage Group, a market research company based in Palm Springs, Calif. By contrast, consumption of spirits and wine has been inching up for several years, reaching 28.5 percent and 13.4 percent respectively last year.

The beer industry is madly trying to figure out how to reverse this trend, which industry insiders insist is cyclical but which some analysts warn could represent a more long-term change in who drinks what and when.

"Demographic trends are working against the brewers," said Bonnie Herzog, a beverage industry analyst for Citigroup Investment Research.

Younger consumers, raised on an ever-growing array of soda flavors and juice drinks, are finding the transition to alcohol a little easier with mixed drinks, which can be sweeter than beer and personalized to one's own taste.

Baby boomers, meanwhile, are gradually transitioning from beer to wine and cocktails. And across the board, beer is suffering from a bit of an image problem.

Cost of complacency

The core consumer of a cold brew is widely thought to be either the football-loving couch potato or anyone with a household income below $45,000 a year. But in today's Internet-savvy, consumer-driven culture, those are not exactly the beacons of a populace that increasingly buys well-designed home products at Target and flips longingly through the Pottery Barn catalog.

"The industry was very complacent in the last couple of years," said Robert Lachky, executive vice president of global industry development for Anheuser-Busch Inc. "Frankly, the back door was left open."

But brewers say they get it now. They say they're on it, even though the industry continued to dip through the first half of this year, according to researchers who follow beer sales. Companies are investing heavily in new product development and new marketing - all aimed at getting people to turn to beer for more "drinking occasions."

Industry executives say what they really need to do right now is make beer cool again.

This problem crept up on the beer industry when it wasn't looking. Beer had been so strong for so many years that it was easy for companies to forget that beer drinkers were not necessarily forever.

"If you told me 15 or 20 years ago that spirits would be growing in the 2 to 3 percent range and beer would be declining, I would've laughed," said John Michalik, North American director for London-based beverage consulting firm Canadean Ltd.

The result was that after decades of success selling a cold one to baby boomers, big brewers hardly noticed 10 years ago when boomers' tastes started to change as they approached 50.

"There was a general assumption ... that the baby boomers would continue with the consumption patterns that they established in their youth," said Benj Steinman, editor of Beer Marketer's Insights, an industry trade publication. "Instead, they're doing more like what prior generations did as they got older, and switching their drinking habits to wine and spirits."

Older drinkers have always favored hard liquor and wine, primarily because they're less filling - simply less liquid - for the same effect, Steinman said.

Wine touted as healthy

Helping the wine industry, too, has been a run of press supporting the positive health effects of red wine and moderate alcohol consumption in general.

In and of itself, this trend would not be especially troublesome for beer, but it has happened at the same time that beer has lost its edge among younger drinkers.

The beer companies had always counted on the "echo boom" - the children of the baby boom - to provide the next wave of 21- to 27-year-old buyers. But these young adults turned out to have a much different view of themselves and their choices, from the coffee drinks they prefer to the bottled water they tote around to the alcoholic beverages they imbibe.

Increasingly, these younger drinkers have been turning to a variety of cocktails - appletini, anyone? Those drinks say more about who they are than does a simple bottle of beer.

The drive to customize

"Young adults are a generation of people who can alter pretty much everything, or at least customize everything to their life style. And beer is beer," said Neal Stewart, marketing director for the Pabst Brewing Co., the nation's fourth-biggest beer producer. "There's different flavors and brands, but with a mixed drink, you can customize that a million different ways."

A convergence of cultural and economic forces have also conspired to depress beer sales. After hovering at around 1 percent growth, or a little less, for several years, U.S. shipments of beer dropped 0.5 percent in 2003, rose slightly in 2004, but fell 1.2 percent in the first six months of this year, according to Beer Marketer's Insights.

Beer industry executives say sales have been hurt by a decline in disposable income among lower-income consumers, especially since the rise in gasoline prices and decline in blue-collar employment, long a target market.

"If you look at our key demographic of 21- to 34-year-olds, there are more kids going to college, they have college debt, more young people have credit cards, there are higher gas prices," said Jeff Becker, president of the Beer Institute, an industry trade group.

"That beer at the end of the day has become a luxury."

Along with lack of growth in real incomes beer companies are feeling the effect of consumers "trading up."

"If you look at what's growing in the beer industry, it's import and craft beers. They're higher priced and perceived as luxury products," said Harry Schuhmacher, publisher of the Beer Business Daily newsletter. "And so if you look at the whole alcohol category, people perceive wine and spirits as high-end, so there's some trading up between beer and wine and spirits."
_________

My thoughts -- YOU GUYS tell me people aren't so stupid that they decide what to drink because of marketing and that they treat drinks as accessories. I could see some girls going out for martinis a few times because they want to be Carrie from SATC, but seriously, for real? That kind of thing really has such a huge effect?

I take issue with the last two paragraphs. I guess I can only speak for myself, but I drink (a lot of) what would be considered "craft beers" -- not because I'm "trading up" or because it's "high end" or "luxury" or whatever -- it's because it TASTES GOOD. The concept of trying to project an image with your choice of beverage is bizarre.

Also, why would tastes becoming "more sophisticated" lead to less beer consumption? Beer is subtle and complex (good beer, at least) but an appletini is just overpowering sweetness and, seriously, gross.

If the tastes of people in general are changing, I can deal with that. I just have a hard time thinking of people being such pansies to marketing. What do you drink? Have your tastes changed? Do you care about the image your drink selection presents?

[CUGreekgirl]

Do you care about the image your drink selection presents?

Heck no.

I used to drink Long Islands cause it was the cheapest way for me to get drunk. After not remembering one night, I switched to the less potent Rum and Coke.

I've always been the kind of person that could care less about what people think about me. When I go out I usually have a few Rum and Cokes then a beer or two to finsih up the night. The only reason I don't drink just beer is because at the bar I go to mixed drinks are cheaper, plus beer makes my stomach feel full.

[sugar and spice]

(I wrote most of my comments before I read your response so it's kind of funny we both mention SATC.)



Girls are also drinking more than they used to, which could definitely skew the trend away from beer. Most of the girls I know either don't drink beer, or do but prefer mixed drinks.

I stopped drinking beer when I turned 21 because I liked mixed drinks more and they were easy to get once I stopped doing my drinking primarily at house parties. I'm gradually training myself to like beer again.

Don't reports also indicate that binge drinking is on the rise? Which, again, in my experience often involves mixed drinks and especially shots.

Right now our popular culture is definitely defined by the current name-dropping, materialistic, glamour-obsessed (or pseudo-glamour-obsessed) trend (see: Sex and the City, chick lit, etc.) and I just don't think beer fits in with that. It's not that "the beer at the end of the day has become a luxury." It's that when people think of treating themselves, they don't think "PBR" -- they think "cosmo."

You clearly don't agree, but alcoholic beverage choices (and especially alcoholic beverage marketing) have always been about image, and what people choose to project about themselves.

Beer needs to find a way to market itself as sexy in a way that does not involve scantily dressed twins mud-wrestling.

[KSUViolet06]

I hate beer. Half the girls I know hate beer. Not because it's not "glamourous", it's just gross. And if I'm going to drink, it has to taste good or else there's no point...

[CSUSigEp]

Why are they scrambling over 1%? Theres still more than 1% more people now than before, so their sales are still increasing what are they worried about?

[sugar and spice]

I thought I'd separate my speculation from the actual answers to your questions because otherwise it would just be too long.

I drink mostly: vodka tonics (honestly, anything mixed with vodka), G&Ts, amaretto sours if I'm not actually looking to get drunk, Long Islands if I am, various girly martinis (raspberry and key lime being favorites). Lately New Glarus Spotted Cow is about the only beer I drink . . . everybody around here drinks this stuff like crazy. I also drink Sierra Nevada sometimes, mostly because my daddy does and my daddy is so painfully hip without even trying. My friends say to me, "Your dad's got a great vinyl collection," and I want to say, "No, my dad has a great RECORD collection," because in my mind vinyl is the word hipster kids use when they're going around finding stuff that was made years before they were born, and my dad got all of this stuff back in the day when it was new, not used, and it is still great.

My friend and I made it a goal of ours to start drinking PBR because PBR is "ROCK N ROLL BEER" (in all caps, always) and we want to fit in with all our guy friends who are in bands, but so far we've sort of been flunking at this.

I almost never do shots anymore.

Image is definitely part of drink choice. If I go out to dive bars with my guy friends I'm not going to be drinking a froufrou girly drink because that's not really the image I want to project. I'm not going to go to a martini bar for a girls night and suck down a PBR, either. Nor am I going to wear a miniskirt and heels to the dive bar or ripped jeans and a vintage tee shirt to the martini bar (of course, there are some nights where it ends up like that anyway, but I would never intentionally plan ahead to do things like that).

Then again, I don't ever go around drinking cosmos because I fancy myself Carrie Bradshaw either, so maybe there is still help for me.

[valkyrie]

Heh. Mad props to your dad, H -- Sierra Nevada Pale Ale is our default beer.

Maybe it's just that I'm er, um, old enough to not care about image? I don't know. I'm REALLY a beer person -- so I'll drink it anywhere, unless I'm drinking mojitos, which is really the only non-beer thing I drink except for occasional wine. To me, drinking is like eating -- I have to enjoy it, period, and that's really my only concern.

I can't imagine someone not liking ANY beer. I can understand not liking the mass-produced swill that passes for beer. But there is so much good stuff out there.

Holy crap, I sound like a stealth beer spokesperson. Yeek.

[RACooper]

Originally posted by valkyrie
Holy crap, I sound like a stealth beer spokesperson. Yeek.

A connoisseur or aficionado maybe... but not a stealth marketer...

That being said -

I agree with your understanding of people tiring of the mass-market el-cheapo crap that is peddled through constant marketing campaigns - particularlly the crap marketed as the cheaper choice (gee wonder what age group that's aimed at).

I whole heartedly agree about the amazing selection of quality beers/ales/porters/bitters/pilsners/stouts available - you just have to be a little decerning. I'm always ready to try a microbrew, specialty, or import that I have tasted before, because maybe I'm missing something I'll love (and add to the line-up).

Some personal favs:
Guiness (old stand-by)
Creemore
Wellington County Ale
Kawartha Lakes Brewery (KLB) Raspberry Wheat
>
>
My current favourite is London Porter - a 'live' porter with a chocolately aroma and taste... with a subtle hint of coffee - I think it'll be my "winter beer" this year (as long as the pub keeps it stocked)

[_Lisa_]

I've always been a beer drinker. Its not that I don't like mixed drinks but I'm not a huge fan of most liquors, so if I get a strong mixed drink I won't drink it. Beer will most likely always be my default order when I go out (although it depends on where I go, I've been drinking my fair share of wine lately.)

My favorite beers (Highest Preference to Least Preference):

Erdinger Dark Wheat Stout Beer
Samuel Smith's Oatmeal Stout
Young's Double Chocolate Stout
Woodchuck Dark & Dry Draft Cider
Guinness
Amberbock
Blue Moon
Red Stripe

[moe.ron]

I pretty much stopped drinking beer after I left college. I've never liked the taste, but it was the cheapest thing to buy in a college bar. Now, with disposable income, I go for either Brandy or Wine.

[AchtungBaby80]

I tend to agree with valkyrie--in my experience, at least, people don't take imagine into consideration much when they're picking alcohol. Their choice depends more on what they like and how drunk they intend to get. I'm not a big beer drinker and never have been, so I stick with rum and Diet Coke but I've watched my friends at the bar and they usually just get Coors Lite or something if they're just having a couple to relax. Most times they want something good, though, so they'll get import beer, or if they're looking to get hammered that night they'll alternate their beers with shots. I would never have guessed, judging by the way the people I know like to consume it, that beer sales are falling. But you know, around here you can often get a mixed drink at a bar for cheaper than you can get a decent beer, so...

[KSigkid]

Originally posted by valkyrie

My thoughts -- YOU GUYS tell me people aren't so stupid that they decide what to drink because of marketing and that they treat drinks as accessories. I could see some girls going out for martinis a few times because they want to be Carrie from SATC, but seriously, for real? That kind of thing really has such a huge effect?

I take issue with the last two paragraphs. I guess I can only speak for myself, but I drink (a lot of) what would be considered "craft beers" -- not because I'm "trading up" or because it's "high end" or "luxury" or whatever -- it's because it TASTES GOOD. The concept of trying to project an image with your choice of beverage is bizarre.

Also, why would tastes becoming "more sophisticated" lead to less beer consumption? Beer is subtle and complex (good beer, at least) but an appletini is just overpowering sweetness and, seriously, gross.

If the tastes of people in general are changing, I can deal with that. I just have a hard time thinking of people being such pansies to marketing. What do you drink? Have your tastes changed? Do you care about the image your drink selection presents? [/B]

I absolutely think what people drink is a matter of image. As far as I know it goes back all the way to Sinatra and the Rat Pack, and possibly further.

As for me, I'm pretty simple in the drink department. While I like a glass of whiskey, scotch or wine occasionally, I'm still bigger into beer. Like you (and as I've posted a million times on this site), I tend to like craft beers and stuff you're not going to find at the local bar.

My favorites include:
Anything by Harpoon
Rogue (especially the Chocolate Stout)
Uerige Doppel-sticke
Anything by Sam Smith (especially Taddy Porter)
Hooker Ale (and not just because it's from CT)

I'm really a beer dork, so I'm going to stop here. I think another big part of it is that people don't know that these breweries are out there; the perception is that beer choices stop at Bud Light and Miller Lite (although, like anything else, there's a time and place for those too). They don't know that beer can be sophisticated, can be paired with meals, and can taste good.

[_Lisa_]

Originally posted by KSigkid
Anything by Sam Smith (especially Taddy Porter)

I love Sam Smith beers! Good choice!

[Lil' Hannah]

I think image has everything to do with it.

I was watching 20/20 a few months ago and they did an informal taste test with a group of self-proclaimed "vodka snobs" in Manhattan. Bill Ritter asked the snobs what their preferred brand was and all said Grey Goose, Belvedere, Ketel One, etc.

The blind taste test consisted of 6 small shots as well as 6 cosmopolitans made with premium brand vodka and one with Smirnoff, which is a call brand. Each one of the snobs picked Smirnoff as the "best" and Grey Goose as the "worst."

The 20/20 piece went on to talk about how they suspect these snobs were just drinking their premium brands because it sounds a lot cooler and sexier to order a Ketel One sour than to order the call or rail brand.

So in conclusion yes, I think a lot of younger drinkers do choose their drink based on image, which would hurt the Millers and the Buds of the world.

[KSig RC]

Originally posted by Lil' Hannah
I think image has everything to do with it.

I was watching 20/20 a few months ago and they did an informal taste test with a group of self-proclaimed "vodka snobs" in Manhattan. Bill Ritter asked the snobs what their preferred brand was and all said Grey Goose, Belvedere, Ketel One, etc.

The blind taste test consisted of 6 small shots as well as 6 cosmopolitans made with premium brand vodka and one with Smirnoff, which is a call brand. Each one of the snobs picked Smirnoff as the "best" and Grey Goose as the "worst."

The 20/20 piece went on to talk about how they suspect these snobs were just drinking their premium brands because it sounds a lot cooler and sexier to order a Ketel One sour than to order the call or rail brand.

So in conclusion yes, I think a lot of younger drinkers do choose their drink based on image, which would hurt the Millers and the Buds of the world.

This is a great point - there have been other blind studies in which bourbon and booze snobs were put to the test, and Jim Beam (seriously) beat out all of the high end bourbons in every category. Image is key, for the 'casual' drinker.

Now, I say that knowing full well that I drink far too much, and that my booze knowledge has pushed actual learning out of my brain - but that's the reality. Everything that involves choice also involves image-conscious decision making.