The Wall Street Journal just published an article about beer sales. For the first time since 2008, beer sales are increasing in 2012. The article attributes this largely to the rise in popularity and accessibility of craft beer, and includes a section on how InBev and SABMiller are trying to work with the public’s new taste for variety.
Something we haven’t touched on much in class is how craft beer can lift profits, because of the higher price point, but lower consumption because a few craft beers are usually sipped over a night and not rapidly guzzled down over an hour, so less are needed.
According to The WSJ, the increase in sales (particularly from young men) shows that the nation is steadily climbing out of the recession and our low spending tendencies.
“Beer has struggled in recent years partly because its key customers, blue-collar males in their 20s, were battered by an economic downturn that hammered industries such as construction. ”
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Hmmm…maybe the US is pulling out of our recession, but maybe the new craft beer market extends beyond 20-somethings. After all, as you note, you can (?) get 2 six-packs of cheap beer for the price of one of the higher-end craft beers (maybe the differential is even bigger … I don’t buy beer often, I buy cheap beer only when I’m making a pot roast, beefing up the barley). As the T&T chapter in Swinnen suggest — ditto our visit to DB — the share of the craft segment is expanding. The “why” may be more sociological, but interesting sociology.
Now would there be a way to test this sociological hypothesis? For example, do we find similar trends with various other goods that are consumed in group settings, a larger share of “trendy” products? I suppose clothing is consumed in public, too, so are there any trends in fashion the past 20 years? Louis Vuitton and all that at the more expensive end, Zara [Spain] and [in Japan] Uniqlo and (?) Onward 21 [US?]. Or watches — there’s now a sizeable market for “collectible” watches (mechanical movements), concentrated in the higher price brackets [$20K and up]. It would be an interesting senior paper!! — leading to a career in “boutique marketing”?!
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