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As 2011 Approaches, Booze Comes Back
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CNBC Reporter
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AP |
And that's good news for the alcohol business, which is $188 billion strong.
Alcohol sales were once called recession-resistant. But the financial crisis hurt just about every segment of the consumer culture, so now, industry experts call it recession-resilient.
Trends are strong in wine and spirits, and even though the volume of beer sold is down, revenue is not off as much because of price increases.
A lot of Americans still choose to have a drink at home rather than go out, but even that trend is starting to shift.
“As the worst of the economic situation appears to be over, and confidence is returning, consumer traffic is up,” said Mike Ginley from Next Level Marketing.
“Most of the major restaurant chains are reporting same-store sales gains now, and that’s a very good sign going into 2011.”
Brian A. Shactman
CNBC Reporter
At the US Drinks Conference in New York City, however, there is considerable disagreement over whether another trend continues: The trade-down.
“Frugality is fashionable now,” Ginley insists. “Even among the affluent, it’s all about frugality—value for the money.”
But to Mike Foglio, who just purchased Anchor Steam beer, one of the country's most-well known craft beer brands, he sees luxury’s strength—with room for growth.
“While there’s still trading down, I just look at other industries,” he said. “There are still a lot of BMWs being sold. Tiffany’s [TIF
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] is doing well. Chanel is doing well. Louis Vuitton Moet Hennessy [LVMHF
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“So, there’s a public out there that wants high-quality spirits and craft beers.”
What isn’t up for dispute among market experts is the potential impact of social networking and smart-phone technology. Right now, some of the marketing is more gimmick than substance.
But that is changing, too.
Gary Vaynerchuk, who hosts the “Wine Library” online, has more than 40,000 Facebook friends and 800,000 people follow him on Twitter.
When he says publicly that he likes a product, it sells.
He thinks that the next wave for smart-phones is pitching consumers right at the point of sale.
“I love the idea of someone going to Walmart [WMT
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] to buy a six-pack of Becks,” he said. “When they get to Walmart, they check in (on their phones) because that’s going to become a new kind of social move. And then, there’s a message from [its competitor] Heineken [HKHHF
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] that says ‘blahblahblah,’ watch this video and then take this UPC barcode and get 50-cents off a six-pack.’ ”
Call it the 21st century circular.
What’s also promising about social networking is how it gives every company the same chance to succeed.
“The nice thing about social media is that it levels the playing field,” said Foglio, who ran Skyy Vodka before creating Anchor Brewers and Distillers. “Companies like mine can actually get in the game like the big companies.”
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