Thursday, July 27, 2006
Experience Globalization: Buy Beer
How the World Works (which is hosted by Salon.com; you'll have to sit through an ad) viewed globalization through beer goggles yesterday after reading an article in the Wall Street Journal describing double-digit jumps in consumption of foreign beers in the Midwest. This is apparently news because-- apparently-- people in the Midwest don't drink imports, in the way that many people in Michigan don't drive imports. (We are a little hacked off about some of the stereotypes in these articles, seeing as how we're based in Chicago.)
Since the WSJ is subscription-only, we will quote two paragraphs of the article for you:
The article goes on to note that the rise in import beer consumption is worrying to domestic brewers, because they've just come off a down year in 2005. But it also provides them with an opportunity: because imports are pricier, US brewers can introduce fancy premium brews that sell at a price slightly higher than their regular product, but cheaper than their foreign competitors.
And if that fails? Why, the US brewers just buy big fat wedges of shares in the competition (beer stocks are doing well, by the way). Win-win: let's have a toast to capitalism.
We at eMvoy know there are a lot of companies in the US making beer-brewing equipment, and the Brewers' Association tells us that nearly everyone in the US is within 10 miles of a brewery (check here). That means there must be a lot of smaller local brewers out there of which we've never heard. If you feel inclined to comment, we'd love to hear about some of your favorite less-well-known domestic beers (quickly, please, we're having a barbeque this weekend).
We'll start things off with one of our favorites: hard-spellin', easy-drinkin' Yuengling.
Since the WSJ is subscription-only, we will quote two paragraphs of the article for you:
But there are signs that domestic beers' traditional hold over the heartland is loosening in favor of imported beers -- and that has American brewers worried. A similar shift happened years ago on the coasts, but only in the past five years has it started to take root in the Midwest, home to Anheuser-Busch Cos. of St. Louis and Milwaukee's Miller Brewing Co., a unit of SABMiller.Zoinks, a 2.8% market share! Curse you, Newcastle Brown Ale! Corona and Tecate, a pox on both your houses (with a twist of lime)!
To be sure, imports still make up a small fraction of beer sales in the Midwest -- but their sales are growing rapidly. In Iowa, only 1.7% of the beer sold in 2000 was imported; by 2004, imports had jumped 65%, to a 2.8% share. In Wisconsin, Miller's home state, imports rose 51% between 2000 and 2004, to a 5.3% share. Missouri, home to Anheuser, saw import consumption climb 21% over that same period, rising to 3.5% of beer sold.
The article goes on to note that the rise in import beer consumption is worrying to domestic brewers, because they've just come off a down year in 2005. But it also provides them with an opportunity: because imports are pricier, US brewers can introduce fancy premium brews that sell at a price slightly higher than their regular product, but cheaper than their foreign competitors.
And if that fails? Why, the US brewers just buy big fat wedges of shares in the competition (beer stocks are doing well, by the way). Win-win: let's have a toast to capitalism.
We at eMvoy know there are a lot of companies in the US making beer-brewing equipment, and the Brewers' Association tells us that nearly everyone in the US is within 10 miles of a brewery (check here). That means there must be a lot of smaller local brewers out there of which we've never heard. If you feel inclined to comment, we'd love to hear about some of your favorite less-well-known domestic beers (quickly, please, we're having a barbeque this weekend).
We'll start things off with one of our favorites: hard-spellin', easy-drinkin' Yuengling.
