USA: Brewers must be more romantic to compete with other alcoholic drinks

Beer still lacks the romance to compete with other alcoholic drinks in America, leaving it stuck on the shelf as consumers move on to new tastes, says a market research specialist, as it appeared on 2 of May, 2006 on Beverage Daily.

The big brewers in the US must do more to romanticise their beers to have more chance of beating the current market slump, said Tom Vierhile, editor of Datamonitor's new product database, Productscan Online.

Anheuser Busch, which alone makes up half the US beer market, announced in its first quarter results last week it had raised beer prices to push up domestic sales revenues.

The American beer market shrank 0.4 per cent in 2005 as more once core consumers turned to wine and spirits. The US was recently named the second fastest growing wine market in the world by the International Organisation of Vine and Wine.

Vierhile said mass-market brewers like Anheuser and SABMiller must help consumers rediscover the romance in beer, which still holds 54 per cent of America's alcoholic drinks market.

“There all sorts of things you can talk about and do to come up with a product that has a perceived greater value,” he said, adding that ways to do this could be focusing on “how beer is brewed, sourcing grains from different parts of the world or even using different glasses for different beers”.

In the UK, the British Beer and Pub Association, faced with a similar onslaught from wine ands spirits sectors, launched a campaign to encourage beer drinking with different meals.

Vierhile said he was confident that “beer will come back at some point in the US”, but it will become harder to do so the longer the current situation continues.

Consumers, it seems, are one step ahead of the big brewers.

Vierhile said mass-produced beer had suffered after becoming the “whipping boy for the low-carb trend” and has now been “hung out to dry because consumer tastes are fragmenting”, with general trends towards stronger flavours and ‘light' options.

Speciality beers, or craft beers, made by small, independent breweries have consistently increased sales in America over the last couple of years, outperforming the rest of the market.

Anheuser Busch, initially slow to recognise the trend, made an attempt to get in on the act last autumn by launching the first of four ‘seasonal' beers. It has also developed organic beer, and its fruit flavour caffeine beer called B-to-the-E.

“They've been doing a lot of experimenting but I don't' know if it's enough to pay the bills,” said Vierhile on Anheuser.

He questioned why Anheuser had not moved into different, more profitable alcoholic drinks sectors.

The group had possibly fallen into the “Coca-Cola trap”, he said. PepsiCo overtook Coca-Cola in market value for the first time in 112 years or rivalry last autumn, largely because it spotted healthy beverage trends sooner and moved out into other areas, such as snack foods, while Coke stayed put.

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