Leaders from the beer industry’s three largest trade associations are vowing once again to unite brewers and distributors in an effort to return the category to growth.
Speaking to a group of nearly 700 U.S. beer distributors attending the annual National Beer Wholesalers Association (NBWA) legislative conference on Monday in Washington, D.C., Beer Institute CEO Jim McGreevy called on industry members to work together to curb volume losses.
“It’s time for us to get in the category boat and row it together to the benefit of every company and every brand and for all of us in beer,” he said.
Those comments were part of a panel discussion titled “Getting Back to Growth,” which was moderated by NBWA president and CEO Craig Purser and also included Brewers Association president and CEO Bob Pease, and IWSR president and industry consultant Brandy Rand.
“Nobody wins when beer people are running down other brands, other brewers, other beer people,” Purser said, calling on industry members to set aside their differences in defense of beer.
McGreevy echoed that statement, while stressing the importance of making category health a “top priority” for everyone in the industry and getting away from the “circular firing squad” of competition.
“Brewers and other industry stakeholders attack reputations and denigrate brands while hard liquor and wine continue to take share,” he said.
Since 1995, beer’s share of the alcohol market has declined from nearly 61 percent to under 50 percent, McGreevy added, noting that volume declines are accelerating.
“Last year, beer declined by 1.3 percent, which is among the softest volume trends for beer in the last decade,” McGreevy said. “And beer’s volume per capita has declined more than two cases of beer, per person, per year, over the last 20 years.”
Those trends are expected to worsen in the coming years. Rand, who delivered a presentation on strategies for growth prior to the panel discussion, said the top five beer markets for beer sales — China, United States, Brazil, Russia and Germany — are either flat or in decline. The world’s top three beer brands — Snow, Budweiser and Tsingtao — are also in decline, she added.
Rand also pointed to research that suggests beer will lose more volume share to wine and spirits. Between 2017 and 2021, the U.S. alcohol market is projected to decline by 37 million nine-liter cases, she said.
So how does the beer industry stem its declines?
McGreevy said there are several key objectives, but chief among them is “elevating the beer experience” and “capturing more occasions.” Of particular importance, he said is the need to better educate servers and and restaurant groups in order to encourage more respect for beer.
“They’re not bringing as much romance to beer as they do some of the other products of our competitors,” he said.
Part of capturing those occasions is improving the on-premise experience. Pease admitted that wine and spirits are “kicking beer’s butt in on-premise on presentation,” and that beer companies could be doing more to educate bar owners about the importance of serving quality draft beer.
“We should win on-premise with draft,” he said. “It’s our point of differentiation. It’s where the romance is with the right pour, the right glassware, but draft in this country is a mess. The quality of draft line cleaning is all over the map. Why couldn’t the three of us work together to make a category-wide effort to improve draft quality across the country?”
Rand offered several opportunities for returning the beer category to growth this year, including an effort to bring more female drinkers into the category.
“If we had just 0.8 — less than 1 percent — more women drink beer, it would add about 2.5 million hectoliters to the category,” she said. “Just one tiny thing”
Other ways to grow the category, according to Rand’s research, include:
- Slowing the rate of decline for domestic light beer;
- Introducing low- and no-alcohol products in an effort to improve volume trends;
- Continuing to grow imported beer sales;
- Continuing to grow on-premise sales of craft beer.
“It’s not just one thing; it’s little levers that can change and return the category to growth,” she said. “So all of these are multiple little opportunities for growth scenarios.”