Craft Brewers Ask, “What Recession?”
House foreclosures. Soaring gas prices. Intractably high unemployment numbers. Record beer sales –
– record beer sales? Despite several years of recession, craft brewers are outpacing national, mass-production brands in sales. The Brewers Association released statistics this summer, reporting that the volume of craft beer sold in the US increased by 14 % in the first six months of 2011. According to CBS Denver, in 2010 alone, craft brew sales exceeded $7 billion in domestic sales – more than double the sales from the last decade. That same year, the export business for craft brews grew by 28%. And while national beer sales actually decreased by 2% last year, craft beers sales increased significantly – by fully 11%.
These striking numbers have some ale aficionados and lager lovers hailing craft beer as the “Champagne of Recession.” What explains this trend?
Paul Gatza, director of the Brewers Association, explains that the surge in sales can be attributed to a newfound appreciation of variety and quality in beers. “America’s beer drinkers are rapidly switching to craft because of the variety of flavors they are discovering,” Gatza says. Incidentally, The Brewers Association also claims that the craft brew industry provides 100,000 jobs to the U.S. economy. While a rapidly expanding and diverse number of options may explain the rise of craft brews, the recession itself may also be fuelling craft beer sales. Many recognize that nice beer is a relatively inexpensive luxury, in comparison to other fine foods and beverages. For example, people hit hardest by the recession can justify splurging on everyday items like a $10 six pack to drink at home vs. an extravagant treat, like an expensive bottle of champagne. The tendency for consumers to purchase expensive food and gourmet items is just one way to cope with economic stress. Karen Grant, senior global industry analyst at the NPD Group, a market research company, says that “[Consumers] are finding little ways to sweeten life in the midst of all the madness.” In other words, in tough economic times, people are treating craft brews as “pragmatic luxuries” that they can justify purchasing on a frequent basis.
However, it isn’t solely grocery sales of craft beers that are reaping the benefits of their rising popularity. In fact, the number of breweries scheduled to open in 2011 is also on the rise from last year, with a good chance that a majority will be craft brewers.
Many have chalked this increase up to the “eat local” movement, including Gatza. “[Americans] . . . are connecting with small and independent craft brewers as companies they choose to support,” Gatza says.
Whether the goal is to support local movements or keep spending in check, craft brewers can all unite in toasting to this profitable trend. Bottoms up!
Tags: Brewers Association, CBS, consumer behavior, craft brewer, eat local, Paul Gatza, recession