With Americans Drinking Less, Booze Makers Seek Alternatives

WSJ What's News
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Jennifer, I think some Americans might be skeptical about some of the numbers here, but they are showing a decline, especially when it comes to beer one and spirits were picking up for a while. But sales growth there has slowed to. So how serious is the situation in the US for brewers liquor companies? They're definitely taking steps to address this trend. Actually, there's very few trends in these numbers. But overall new data show that US alcohol volumes fell zero point percent last year and that steeper than zero point seven percent. Decline in twenty seventeen and unpacking that a bit beer was the worst hit beer volumes were down one point five percent in two thousand eighteen compared with a one point one percent decline in two thousand seventeen so brewers are taking this very seriously and taking a vase of. Maneuvers as it were. So what's happening here? The Wall Street Journal has been covering shifts in consumer tastes for food and drinks for Weil. What is going on when it comes to alcohol consumption? There are few things going on. I a lot of folks are drinking less, but better that means that they are trading up to maybe a pricier option. Let's say they're drinking a couple of craft beers instead of a six pack of, but there's also a trend away from beer toward one and spirits. And then overall people are drinking less alcohol that means that there is sort of a health and wellness a trend at foot. It also just means that people are especially younger millennials. But I think it actually does play cross several generations. They're looking at what they're putting in their bodies are being more selective about it looking at ingredients. And that means that overall they might be consuming sort of less of a volume and maybe a few. Pricier maybe more natural ingredient sort of focused beverages. Are we seeing the same trends overseas? Or is this more play in the United States? It's definitely happening in other markets. Although in the US, it's perhaps more pronounced the health and wellness trend. We're seeing across the board and the premiums -ation trend. Also in developed markets is quite common. Now, it's been playing for a few years and a lot of alcohol companies with their spirits or beer brewers have been coming out with higher end products. You know, this shift from American loggers toward craft beers. And the same is true. If you look at vodka or tequila or whiskey on and on and on the big companies are positioning their brands and developing new brands to sort of play into where consumers are headed. What else are beer and wine makers doing to stay ahead of the trends? Here will turn it was are they looking at so because in some. Cases, people are just drinking less. There are a number of beer and spirits companies. That are rolling out low end, no alcohol products. You got a bunch of zero point zero beers. That are either available here or will be soon. You've got you know, anti-bush imbed the world's largest brewer saying that their new quote beyond beer. I unit is a big focus of theirs in they're acquiring an energy drink company, and they're bottling ice tea. They're launching a seltzer. You've also got beer companies that are branching way. Beyond beer. They're cooking up coconut water, come boo. Shop much T. So we see a lot of branching out and a lot of experiments in areas where consumers have shown interest in whether it's the health and wellness space just sort of lower alcohol space and also something we've been reporting on a lot late. Brewers seem to be investing more in cannabis infused drinks, partnering up with startups and producers, for example, pets right so cannabis is I think one of the most interesting developments in the beverage industry of late and big beer companies in the US are either thinking about it or talking about it or investing in cannabis the biggest deal so far has been constellation brands, which is company that imports corona and Modell in the US and they invested four billion dollars last year a Canadian cannabis company, and that was followed by a JV announced by most in cores. They're developing cannabis beverages and ABM Bev is now researching cannabis beverages all of these sort of in partnership with different Canadian companies, but the idea is that consumers are going to have new options as these cannabis markets opened up in Canada and potentially in the US and other.

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