The Death of the American Beer Drinker

Sales of beer, once a "slam dunk" economic indicator, is falling behind the increasing sales of wine and hard liquor. The problem, according to Slate's Daniel Gross, is that Americans are trading the "high-carb beer for cardiac-friendly merlot." Are Americans become more and more Yupified? Or is it the Two Americas theme being applied at the mall, where the rich are spending more on wine and the poor less on beer?

When the economy is booming, we pound a six-pack of Bud with our buddies and watch the game. When the economy is lousy, we pound a six-pack of Coors with our buddies and watch the game. When the economy is flat, we pound a six-pack of Miller with our buddies and watch the game. This is why companies that make beer—like those that make diapers, electricity, and cereal—have countercyclical stocks. When the economy hits a soft patch, investors take refuge in them.

But now there's a fear in our beer. Last week, two leading beer companies reported disappointing results. Anheuser-Busch, which claims more than half the U.S. beer market, announced it was suffering from falling demand and rising costs. The volume of Bud and Michelob sold in the U.S. fell 2.7 percent from the year-ago quarter. Newly merged cross-border beer powerhouse Molson Coors reported a loss, with net sales in the U.S. down 2 percent, and U.S. operating income off by nearly one-third. The most recent trading statement of Miller, the No. 2 U.S. beer brand now owned by SABMiller, showed marginal growth. In the past two years, according to Gary Hemphill, managing director of Beverage Marketing Corp., beer volume has risen at a meager 0.5 percent annual rate.

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