Beer consumption has declined in recent years, and brewers are belatedly moving to shore up their appeal to increasingly sophisticated consumers, the Washington Post reported Oct. 9.Beer's share of the alcoholic beverage market fell from 59.1 percent in 1998 to 58.1 percent last year, while consumption of wine and liquor has been rising. Beer consumption is down among both new drinkers raised on soda and fruit drinks and Baby Boomers who have moved on to wine and cocktails. "Demographic trends are working against the brewers," said Bonnie Herzog, an industry analyst for Citigroup.
Beer is increasingly perceived as a drink of the inactive and the lower classes. Brewers now say they need to make beer cool again. "The industry was very complacent in the last couple of years," said Robert C. Lachky, executive vice president of global industry development for Anheuser-Busch Inc. "Frankly, the back door was left open."
Liquor companies have magnified the appeal of their products by marketing them as cool and sexy. "Young adults are a generation of people who can alter pretty much everything, or at least customize everything to their lifestyle. And beer is beer," said Neal Stewart, marketing director for the Pabst Brewing Co. "There's different flavors and brands, but with a mixed drink you can customize that a million different ways."
Young and low-income drinkers also have less to spend on beer since gas prices have risen and blue-collar incomes have declined. "If you look at our key demographic of 21- to 34-year-olds, there are more kids going to college, they have college debt, more young people have credit cards, there are higher gas prices," said Jeff Becker, president of the Beer Institute. "That beer at the end of the day has become a luxury."
Americans have also developed a taste for more refined beers over inexpensive standards like Bud and Miller. "If you look at what's growing in the beer industry, it's import and craft beers. They're higher priced and perceived as luxury products," said Harry Schuhmacher, publisher of Beer Business Daily. "And so if you look at the whole alcohol category, people perceive wine and spirits as high-end, so there's some trading up between beer and wine and spirits."
Brewers have tried to cut prices to drive up consumption, but that also produces headaches. "If you fight on price, it's not necessarily helping the brand image of beer," said Herzog. "It could be hurting the brand equity."
Other approaches include new products that mimic the appeal of energy drinks and ads that target a more upscale audience for products like Miller High Life. "The problem in American beer is sameness -- one big mass of couch-potato jokes thrown at American males in a way that was okay 10 years ago," said Tom Long, Miller's marketing chief. "Adoption leaders and style leaders aren't seeing themselves in that imagery."
Boston University School of Public Health 
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