The US Beer Market is Expected to Grow, Despite the Challenging Economic Circumstances

Monday 19 August 2013, Amsterdam

The US Beer Market is Expected to Grow, Despite the Challenging Economic Circumstances
Despite challenging economic circumstances, US beer consumption returned to growth in 2012 with volumes up by 1%. Craft beer was one of the highlights, with sales rising almost 15%. New products such as Bud Light Platinum, Bud Light Lime and Steel Reserve made an important contribution to the growth in the beer market by bringing some much needed dynamism and personality to a beer segment which over many years has become overly dependent upon a handful of top-selling mega brands such as Bud Light, Budweiser and Miller Light. It is clear that the continued fast pace of growth for the craft beer industry is not without its challenges as some of the larger regional players begin to hit capacity issues and start to consider the most appropriate strategies to expand sales. At the same time the number of new beer product introductions is beginning to provide a headache for beer retailers, due to the number of specialty beers now on sale. Nevertheless the US beer segment will continue the positive momentum that was seen in 2012.

Back to growth thanks to craft segment and new products

The US beer market confounded expectations and bounced back to growth in 2012, rising by 1%. Once again Per capita consumption also rose slightly after declines over recent years. The growth in the economy was driven by a combination of factors, but was largely underpinned by the continuing buoyancy of a craft beer segment which continues to go from strength to strength. The craft segment has clearly captured the beer drinker’s attention by providing local beers with a wide variety of tastes and lots of personality but on a small scale in sharp contrast to the mega-brands which have hitherto dominated the US beer market.

Imports also grew quite strongly during the year with volume up by almost 2%, adding more than 600 th hls with Belgium, the Netherlands and especially Mexico experiencing very solid growth and more than compensating for sharp declines in Canada and Germany. Another notable contributor to the growth of imports was Poland – up by over 13% within the core beer market segments new products made a significant contribution to the turnaround in the fortunes of the beer market. For example the success of Bud Light Platinum in its first year helped to stem the decline of light beer consumption to less than 1%, while Budweiser Black Crown and Third Shift had a somewhat similar impact upon the premium (local segment) segment. At the same time further additions to the Blue Moon, Leinenkugel and Henry Weinhard`s ranges helped to boost volumes in their respective segments.

Fiscal cliff impasse delayed public and private investment, reduced spending

According to the Bureau of Economic Analysis, US GDP growth in 2012 averaged at 1.7%, compared to 3% at the end of 2011, so while on the one hand the economy at least continued to grow, on the other there were few signs that it was gathering any real momentum. Indeed all the evidence indicated that the $1 trillion government stimulus program and a fast-growing government deficit had singularly failed to deliver the rapid economic recovery which had been expected. Instead the recovery remained protracted, taking much longer than anticipated for business activity to respond to the significant levels of investment and liquidity which have been pumped into the economy.

Nevertheless the US economy started the fourth quarter looking quite robust, but then slowed dramatically firstly with the disruptions caused by Hurricane Sandy in the north east and then through increasing uncertainty among businesses and consumers over the potential impact of the "fiscal cliff" threat of major tax increases and deep government spending cuts.

USA Beer Market Insights 2013

USA Beer Market Insights 2013

Publish date : July 2013
Report code : ASDR-73358
Pages : 163

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