Recent reports from industry research firms Mintel and Technomic show a shift away from domestic beer toward wine, spirits, and craft beer.
Wine and Spirits Take the Lead
Mintel reveals that domestic beer from larger breweries is falling out of favor with Americans, with 22 percent reporting they are instead drinking more wine instead of domestic beer, and another 18 percent shifting toward spirits. However, despite flat volume sales on the traditional domestic brew, craft beer continues to make inroads, particularly among the 25-34 age group, where 51 percent feel that smaller producers make better quality products than their larger counterparts.
One reason for the cutback in domestic beer consumption is health. According to Mintel, 20 percent of American adults are reducing their intake because they believe beer has too many calories, while 15 percent believe it to be unhealthy. This perception has also helped buoy the sales of wine, traditionally seen as a healthier option. Wine sales rose 2.6 percent in 2013 to an estimated $42 billion, compared to a stagnant 0.3 percent for domestic beer.
In addition to calorie concerns, much of the shift can be traced back to consumers’ lust for variety and different flavors, with craft beer and hard cider, along with wine and spirits, showing significant upticks in consumption over the past six months, particularly among the 25-34 cohort.
Nearly 55 percent of all beer drinkers say that they like to try new alcoholic drinks like craft beer or hard cider, and 18 percent of those aged 22-24 report drinking more hard cider in the past six months, the largest increase amongst any alcohol type across all measured age groups.
Drinking Less, But Better
This trend is echoed in Technomic’s findings that premium adult beverages are providing momentum to the on-premise channel despite cautious consumers. Although the channel is slowing down somewhat, higher-priced spirits and beer categories are still growing, reveals the research group’s 2013 BarTab Report. The on-premise channel grew in total volume (0.7 percent) to reach 1.9 billion gallons and sales rose 3.5 percent to $97.3 billion in 2012. Projections call for slight declines in volume in 2013 and 2014, but continued dollar growth.
"Two seemingly opposing trends are at play," explains Eric Schmidt, Technomic director of research. "The slow economy and a level of uncertainty have some consumers reducing their visits to or spending in restaurants and bars, while at the same time their interest in more complex flavor experiences is prompting them to continue exploring more expensive products, such as single malt Scotch, imported vodka, and craft beer. It's reminiscent of the 'drinking less but drinking better' trend of the early 1990s."
Domestic Wine Over Imports
Domestic table wines are capturing the wine purchase in restaurants, bars, and other on-premise locations, accounting for 69.4 percent of total on-premise wine in 2012, details Technomic in its BarTab Report. Six in 10 (60 percent of) consumers order wine at least once a month in on-premise locations such as bars, restaurants, hotels and lounges, according to the report. Women order wine slightly more often away from home, at 63 percent versus 58 percent compared to men. Generating $10.8 billion in sales, domestic table wine volume grew 1.2 percent to reach 48.1 million 9-liter cases, while imported table wine volume has been essentially flat, reports Technomic.
By Joann Whitcher