Ad Age says "Beer is Dead"

Modern Brewery Age, May 9, 2005

Warren Buffet may be tickled pink by his new stake in the industry, but not everyone is high on the beer business. On the cover of this week's Ad Agemagazine is a picture of a tombstone and an open grave. On the tombstone is the inscription: "Beer R.I.P." and the epitaph "killed by spirits."

Ad Age has joined the parade of observers and analysts who have stepped up recently, not to praise beer, but to bury it. The story in Ad Age cites a decline in beer sales, and points to an exodus from the beer category by younger consumers.

Using figures provided by the Distilled Spirits Council of the United States, the story points to share decline for beer, from 56% of the alcohol beverage market in 1999 to 53.2% in 2004. Spirits increased from 28.2% share to 31.3% during the same period.

The article also cites a study by Simmons Research, in which 48.4% of males age 21-29 said they drank regular domestic beer in 1999, but only 44.4% of that group drank regular domestic beer in 2004. Light beer also lost a percentage point among 21-29-year-old young men during the same period.

The article decries "homogenous [beer] marketing ... where entertainment value frequently overshadowed any effort to build of differentiate brands."

In addition, the article cites consumers "trading up" to spirits, particularly women in the "Sex and the City" demographic. Lastly, the article points to declines in bar and tavern-going, quoting Harvard Professor Robert Putnam: "Americans are staying home in the evening, and Cheers has become a period piece."