The beer industry has a data problem, and it’s not gloomy scans – it’s what data the industry is paying attention to (and not), and the assumptions being made, according to Lester Jones, chief economist and VP of analytics at the National Beer Wholesalers Association (NBWA).
Jones spoke Thursday during Day One of the American Cider Association’s (ACA) CiderCon business conference in Chicago.
There have been many bogeymen blamed for beer’s decline – from cannabis, to consumers drinking less/Dry January, to economic hardship – but the data doesn’t necessarily support these theories, causing “cognitive dissonance” in the industry, Jones shared.
Jones implied that the beer industry is “being held captive” by scan data – equivalent to “Stockholm data syndrome” – and he encouraged members to “lift your head up and look around,” instead of being locked into spreadsheets.
According to off-premise scans from market research firm Circana, beer dollar sales declined -0.6% and volume -2.6% in 2024. However, total sales to retailers (depletions) actually increased last year, according to Jones, citing Fintech data.
Retailer beer purchases increased +3.1% in 2024, from $68.6 billion in 2023, to $70.7 billion, according to Fintech, which tracks invoices for about one-third of licensed beer-selling retailers. The category started the year out even stronger, but the industry “tanked” in the second half of the year, including a slump in summer sales.
Additionally, consumer spending on food and beverage away from home continued to grow in 2024, outpacing spending at home. Food and beverage spending away from home has historically been below at-home spending, and fell significantly in 2020 due to on-premise closures during the COVID-19 pandemic. But once the lockdowns ended, consumers took full advantage, and spending away from home surpassed at-home spending in 2022, with the gap continuing to widen.
Other data sets also imply that consumers are spending more and going out more in 2024 than in the past, including hotel reservations, TSA numbers and airline prices.
“We spent a whole year obsessed with scan data – what’s happening in grocery stores and convenience stores,” Jones said. “It made me hopping mad, jumping up and down, screaming.
“If you’re captured by scan data in your firm and only looking at what’s selling in grocery and convenience, you’re missing a whole growth story of what’s happening out in the U.S. economy,” he continued.
“And if you’re convinced that the at-home stuff, the off-premise scan data is the guide to your future, you’re just batshit crazy. You gotta embrace the whole data set and the whole market and think about everything together. Otherwise, you’re missing the story.”
Jones emphasized that consumer behaviors have remained relatively predictable historically. What they are drinking and where they’re drinking may fluctuate – particularly in the age of omnibibulous drinking, with more cross-category consumption than ever before – but the seasonal bev-alc trends and overall consumption has remained consistent, Jones said.
Jones also balked at claims that Dry January has an effect on full-year trends, calling the month “insignificant to our industry.” Dry January has “always been here,” but any declines in bev-alc sales have always been countered by spikes in sales later in the year, Jones said.
“People have always taken a break in January,” Jones said “They’ve always made New Year resolutions, and they’ve always broken them. That’s time tested and true since man lived with dinosaurs in caves.
“Be very careful when you look at your marketplace to avoid the gross generalizations,” he added.
So What’s the Problem?
If Dry January, cannabis or curbed drinking are not to blame for declining beer sales, what is?
Part of it is the continued impact of the pandemic, according to Jones. Beer is still in a “correction period” and trying to balance an oversupply of the market, as well as supplier and wholesaler warehouses, with the industry overestimating off-premise demand.
Additionally, there are fewer beer-selling outlets than there used to be. Total bev-alc retail accounts peaked around 2017 at 269 accounts per capita, Jones shared, citing NIQ data. At the time, bev-alc was sold at retailers beyond grocery, convenience and liquor stores, with availability at clothing and home goods stores, and even libraries, Jones said.
In 2020, when COVID-19 shut down many businesses, that number dropped to 242 – its lowest point since at least 2008. The number of selling accounts has increased slightly every year since, hovering around 252 as of 2024, but is still below the amount of retailers selling more than a decade ago.
“We don’t have all the points of distribution and all the shelf space that we had prior to 2017, that’s part of the malaise that we’re seeing,” Jones said. “We’re interpreting it as Dry January, we interpret it as GLP-1 drugs, we interpret it as the impact of marijuana, but it’s really not. It’s just that all the places we had to put it before are not there anymore.”
In 2024, weather also had a significant impact on bev-alc sales. Last year was the hottest year on record, and when temperatures rise, consumers avoid drinking alcohol, according to Jones.
“That’s why water is one of the fastest growing segments,” he added.
Additionally, beer specifically is losing consumers to products that better connect with them – particularly the consumers who have the most buying power, such as women.
Beer continues to overindex with male consumers and underindex with women. More than half of total beer consumers are men, and the same can be said for craft beer. Men also dominate consumer bases for imports and flavored malt beverages.
However, a larger percentage of women consume vodka, wine, hard seltzer and ready-to-drink cocktails compared to men. The advantage for those segments from that demographic makeup comes from women having an increased participation in the labor force and college education versus men, which typically translates to higher earnings and more disposable income, Jones said.
Jones emphasized that it’s disingenuous of the beer industry to blame consumers for the category’s hurdles. Instead, suppliers – the people who “make and innovate and drive new products” are “the problem.”
“If I see one more CEO of a major alcohol-beverage company blame the consumer, I swear I’mg going to blow a fuse,” Jones said.
“When the economy is growing the way it has, and personal income and wage and real wages and economic [trends] have been growing and doing as well as it did in ’22, ’23 and ’24, I find it disingenuous for a CEO to blame consumers. Go get another job, because you failed.”