Big Brands Get The Budget Cut

And like the big domestic brands, big-name imports are tanking in post-economic meltdown America. Imports are down nearly 10 percent in barrelage through September, according to the Beer Institute. Familiar names like Foster’s Lager, Amstel Light, Bass Ale, Pilsner Urquell, Moosehead and Grolsch have seen U.S. sales drop by double digits. Fewer Americans are drinking Guinness (down 5 percent), in spite of the hoopla surrounding the brewer’s 250th anniversary, which included the introduction of a special anniversary beer and a series of concerts worldwide.

The conventional wisdom is that financially pinched beer drinkers are trading down from $8 six-packs of green and clear bottles to budget brands like Keystone Light. There just isn’t enough difference in flavor to justify paying for a beer’s boat ride across the ocean.

It’s a little more complicated for Corona and Heineken, the lead brands dragging down the whole pack. “The old guard has been caught off guard,” comments beer industry consultant Bump Williams. He cites a number of factors, ranging from import pricing being “out of whack” to the desertion of former Corona spokesman Jimmy Buffett to hawk Anheuser-Busch’s Land Shark brand. He also mentions that the soft economy has prompted the exodus of minorities who consumed a great deal of Corona. “It costs them more money to live here as opposed to a year-and-a-half ago when they were sending money home.”

But just as domestic beer is buoyed by a craft beer segment (up 5 percent in spite of the recession), the import segment has its bright spots. “Our sales are up,” comments Craig Hartinger, marketing manager for Merchant du Vin, the Tukwila, WA-based company that imports Samuel Smith’s ales, Lindemans lambics, the gluten-free Green’s Belgian-style beers and numerous other brands. “There ought to be a category called craft imports,” he asserts. But no one has attempted to define such a category, let alone tabulate barrels.

Supply and Demand

It appears counter-intuitive that in the midst of a recession consumers would be splurging on the priciest segment of the beer industry, but Steve Cardello floats the idea of beer as an affordable luxury. “If you ask what you can buy with a ten spot, merchants who sell gourmet cheese, Scotch and cigars will laugh you out of their stores,” comments Cardello, market manager for Duvel Moortgat USA. “You can’t even buy a boxed wine for that price. But you can go out and buy a 750-mililiter bottle of one of the best beers on the planet for $10.”

Cardello notes that bottle sales of Duvel, the archetypal Belgian strong pale ale, are up 8 percent. In spite of dwindling on-premise sales as customers opt to eat and drink at home, the draft-only Duvel Green is doing almost as well. This lighter cousin of Duvel (6.8 percent ABV, as opposed to 8.5 percent) is made from the same ingredients but doesn’t undergo the secondary fermentation that Duvel undergoes in the bottle. “Because of the intense pressure that builds up, the kegs would explode,” elaborates Cardello. “A draft presence is a must,” he continues. “The first thing I do when I’m at a bar is look at the taps long before I look at the bottle listing.”

It’s clear that many beer connoisseurs are equal-opportunity buyers of flavorful and quirky beers, regardless of their point of origin.