2023 wasn’t a great year for the alcohol industry as a whole, but it was particularly tough for the beer business. While total beverage alcohol (TBA) experienced a 2.6 percent volume decline, beer plummeted by 5.1 percent, presenting several challenges for brewers.
Despite predictions that the market would level out slightly in 2024, volume decline persisted across categories from January to July 2024. According to new data from U.K.-based data analytics firm IWSR, TBA volume declined by 2.8 percent in the first seven months of the year, with beer alone down 3.5 percent.
“Across the board, these declines are slightly worse than what was forecast at the start of the year,” said Marten Lodewijks, president of the IWSR’s U.S. Division, citing the IWSR’s prediction of an overall 1.9 percent TBA decline in 2024. “The slight recovery that was expected has failed to materialise, indicating that the difficult trading environment has not eased and that consumers are still feeling the pinch of higher prices. A successful second half of the year could still undo some of these losses — but it does make the job that much more difficult.”
Nationwide, almost every beer market is in decline, with Indiana the only state to experience any growth (1 percent) from January to July. The situation also wasn’t as bleak in Tennessee, Missouri, and Pennsylvania, all of which remained flat year-over-year in the seven-month period. And while some of the largest beer markets in the country — Florida, Texas, New York, and Illinois — all reported losses, they were contained between one and three percent, notably lower than the national average of 3.5 percent. Other large markets like Georgia, Ohio, and California saw beer volumes dip further from 4 to 6 percent.
On the flip side, New Hampshire experienced the largest decline of any state, with beer volumes down a whopping 13 percent. Hawaii and Maine weren’t far behind, both reporting 12 percent losses. Tied for third place with a decline of 11 percent are Wisconsin, Kansas, and Vermont.
Despite beer’s overall losses, the super-premium segment is a glittering bright spot: the sub-category swelled in 27 states, including California, Florida, New York, and Texas. It’s this growth that offset plummeting sales in what the IWSR calls “rapidly declining standard and value tiers.” According to the data analytics firm, growth in the super-premium beer category is partially due to premiumization across all beverage categories, but can also be attributed to the comparatively low costs of premium beer.
“[It’s] likely driven by consumers downtrading from more expensive categories into beer, but doing so in higher price tiers so that they still get a sense of premiumization while spending less out of pocket for a premium beer versus a premium wine or spirit,” Lodewijks explained in the analysis. “Consumers can switch from spirits to beer, but trade up to a higher price tier of beer for the same or less money.”
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