The State of American Beer

Is the changed marketplace a temporary decline or generational shift?

Whether the American beer market looks basically healthy or in decline depends very much on your vantage point. If you lead an international brewing corporation with multiple brands and markets, the global potential of American beers seems positive.

If your focus is the U.S. market, however, you worry that traditional brands are flabby, and the strategic diversification of the brewing portfolio is an appealing fix. And if you are on the brand team watching one of the individual flagship brands lose ground, buttressing its support among traditional drinkers feels urgent.

But if you are selling beer locally, faced with changing tastes and demographics, your task is to build the right brand mix to keep consumers coming back.

Whatever your perspective, the beer market is still dominated by a relatively small number of high-volume, well-established brands. The 10 best-selling American beers on the market are all variants on the pale lager/light lager style; nearly all have recently experienced one soft-to-bad year after another.

Mainstream beer experienced a similar slump in the 1980s and recovered. The question now is whether the current slide is cyclical or fundamentally transformative.

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Big Brewers on Top

Six of the 10 top-selling beers are produced by Anheuser-Busch InBev; of these, four have lost market share. Some have decreased modestly: Busch Light fell 0.1% in 2014, while top-seller Bud Light was down 1.7% to 511.6 million 2.25-gallon cases. Other brands fell more dramatically: Budweiser slipped 4.6% from 2013 to 2014 and Natural Light was down 6.8%.

The company’s only beers to have grown in volume are two that would seem to be at opposite ends of the A-B InBev spectrum: value brand Busch, which increased 2.0% in 2014, and prestige brand Michelob Ultra, which was up 2.3%. (All numbers are from The Beverage Information Group’s Handbook Advance 2015, published by Cheers’ parent company.)

The remaining beers in the top 10—all produced by the other mega brewer, MillerCoors—faired worse. The once-buoyant Coors Light retained its number-two sales position over Budweiser, partly because its decrease of 3.5% was less than Bud’s 4.6% drop.

Miller Light suffered moderate losses, falling 1.6%, while Keystone Light and Miller High Life, at numbers nine and ten, slipped by 8% and 6% respectively.

Looking at a broader field of 25 top-sellers, the story continues of flat-to-discouraging numbers for many mainstream pale lagers and light lagers. Bucking the trend, Yuengling, which has been redefined into the craft beer club by the Brewers’ Association, saw healthy growth of 6.4% for its lager.

But Boston Beer Co., which itself defines the upper reaches of the craft beer club, watched its flagship Samuel Adams Boston Lager slip 1.2%.

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