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The Beer Economy: Forecast for the Summer Drinking Season

Ahhhhh, summer. A season of fresh-cut grass, sun-filled days and an ice-cold brew.

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AP

Will this summer see the continuation of that trilogy of awesomeness or will the recession leave the cooler empty?

So far, beer shipments, which include grocery stores, restaurants and everywhere that beer is sold, are down 4 percent year to date, according to the latest statistics from the Beer Institute.

“Volumes are the worst they’ve ever been since Prohibition!” exclaimed Harry Schuhmacher, publisher of Beer Business Daily.

The biggest decline in sales have been in imported beers as many consumers gave up such luxuries during the recession and light beers (Miller Lite, Coors Light and Bud Light ), which have taken a hit as baby Boomers, their biggest fans, are getting older and drinking less, Schuhmacher said.

Plus, beer prices have been going up as the big brewers, high off of their power with recent consolidation in the industry, have passed on higher prices for raw materials such as barley, cardboard and aluminum to consumers.

At the same time, wine and spirit prices have remained flat. So, for thirsty people looking to cry in their beer during this recession, a more affordable choice was to cry in their vodka, bourbon, rum or wine.

Two categories of beer have done well — craft brews, which have seen double-digit sales gains, and lower-priced beers such as Keystone Light and Natural (Natty) Light.

Schuhmacher said those trends have been in place for the past two years.

“I think the [beer] industry lags the economy a bit,” Schuhmacher said. “I don’t think it’s an indicator. Whatever the economy’s doing, it hasn’t shown up in beer yet.”

Overall beer sales have steadily declined in the past two years but if the first big holiday of the summer is any indication, it should be a good summer drinking season.

“I’m hearing early reports that Memorial Day was pretty good,” Schuhmacher said. “I think we’ll see better trends in the second half of the year, starting this month,” he said.

But don’t expect big sales or discounts on beer — Schuhmacher said beer makers are still hoping to jump-start sales with innovation, not price cuts.

So brace yourself for new products designed to appeal to a generation raised on bold flavors (such as Bud Light Lime), hip-sounding low-calorie beers such as MGD 64 (64 calories) and Budweiser Select 55 (55 calories), and splashy advertising campaigns to get consumers to drink up.

“As long as the weather holds up, things are looking a little better,” Schuhmacher said, adding that you want it mild and sunny — not too hot.

“Heat waves drive people back inside. Once they go inside, they don’t exclusively drink beer,” he said. “Beer is an outdoor beverage. If people are outside, they’re usually drinking beer.”

As Homer Simpson would say: “Mmmmm. Beer.”

Pony Treats:

Bart, a Woman Is Like Beer … Homer had a million ways to express his love for beer – and to try to bring his son up with the proper appreciation. Here’s a whole lot more Homer on beer!

Beer as Currency. In Australia, you can get anything done with a case of beer, from getting help with your move to getting your grandson to do chores. Now, Toohey’s is using that longstanding tradition to sell its brew.

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