If your bartender or wait staff begins to answer the question, “What’s on draft?” with “Bud Light, Coors Light…,” it may be time to change your taps. Light beer sales are declining.
Shanken News Daily, a provider of exclusive news and research on the wine, spirits, and beer business, shared information from Impact Databank that the light beer segment of the U.S. market experienced a decline of eight percent since it peaked in 2008 (“Impact Databank: Light Beer Heads Toward 10-Year Low as Other Categories Steal Share”).
The report notes that 2013 marked the fifth consecutive year of decline for Bud Light, dropping 3.1 percent, and that Coors Light dropped 1.5 percent after nearly a decade of consecutive gains.
Where Beer Sales Are Increasing
Despite the decline in light beer sales, the U.S. Census Bureau reports that the number of breweries is increasing. In fact, that number has more than doubled between 2007 and 2012, growing from 398 to 869*, according to “U.S. Breweries are Booming According to Census Bureau.” During that same period, the value of shipments also increased from $21.2 billion to $28.3 billion.
Craft beer is driving the increase. As we noted in Craft Beer Growth at the start of 2014, although beer lost six percentage points of market share between 2000 and 2011, craft beer production and sales were up and anticipated to represent 15 percent of the industry by the close of the current decade.
Once Popular Beers Falling by the Wayside
In the last five years, once popular Michelob Light’s U.S. sales declined by almost 70 percent, according to USA Today’s “Nine beers many Americans no longer drink.” Other light beers on that list include Heineken Premium Light and Milwaukee’s Best Light.
There are plenty of bars and restaurants that are still dedicating tap space to light beers. Maybe you’re one of them. If so, monitor your sales very closely and commit to future purchases of kegs of light beer with extreme caution, or you could lose patrons and profits. This trend shift is the latest in a growing list that younger consumers are gravitating toward stronger flavors. Additionally, this demographic is focusing more on “locally grown or produced” and will likely opt for an offering from a local craft brewer than the national choices, especially now the light ones.
With the decline in light beer sales, it’s time to evaluate how you choose to dedicate tap space to keep your patrons happy and profit margin healthy.
*Note: The U.S. Census does not include brewpubs in this figure, deeming them to be food and beverage establishments, according to The Week “Is the Census Bureau underestimating American breweries?”