Alcohol Sales Climb Despite Economic Downturn

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Alcohol Sales Climb Despite Economic Downturn


NEW YORK -- Liquor store owners and operators of c-stores sell alcohol can rest easier: sales of alcoholic beverages continued to climb throughout the recession and have further expand in recent months, according to a CNNMoney report.

In 2008, alcohol sales grew by more than 9 percent. They slowed down a great deal in 2009, but still expanded by 1 percent. Now business is booming once more, according to financial information company Sageworks, which reported that sales grew nearly 10 percent during the 12 months that ended May 31.

So, do people drink in spite of the recession or because of it? Either way, it's good news for the industry. "I wouldn't say it's recession proof," said Esther Kwon, an alcohol industry analyst for Standard & Poor's. "People will buy less and they will move to different venues, meaning moving to home instead of a bar. But people will continue to drink, regardless."

"These numbers grew almost in spite of the recession," added Sageworks analyst Sam Zippin. "Other than going to the doctor, [alcohol] is another need to have." Zippin also noted that healthcare was the only other industry that continued to expand throughout the recession.

Sageworks found that retailers, wholesalers and bars maintained growth, along with the manufacturers. Wine and spirits and craft beers expanded without difficulty, but legacy beers had more trouble.

"It appears that some of the mass-produced beers, Coors and Budweiser, are getting squeezed," said Zippin. "[Consumers] are either going to really low-cost beers, like PBR (Pabst Blue Ribbon) or they're going to the craft beers."

Coors Light grew 1.1 percent in 2010, according to the report, while Miller High Life sales fell more 4 percent; Budweiser, 7.3 percent; Busch, more than 6 percent; Bud Light nearly 2 percent; and Natural Light, 3 percent.

"The economy has been a major driver of declines within the industry," said Dave Peacock, president of Anheuser-Busch. "The unemployment rate among core blue-collar beer drinkers remains three times that of more affluent, white-collar consumers."

Craft beer had a good year, with sales at market share leader Boston Beer Co. growing 1.7 percent, the report stated. Other brewers saw huge expansions in sales, with Sierra Nevada Brewing Co. growing 7.8 percent; Magic Hat Brewing Co., 14.8 percent; and New Belgium Brewing Co., a whopping 18.3 percent.

"The craft beer costs more, but the consumers are saying, 'We're getting something different here and we're willing to pay for it,’" said Kwon.