Does a Bad Economy Mean Less Beer?

How much does a bad economy affect beer sales?

In the UK, they claim that it matters a lot. In the US, apparently not so much. An interesting dynamic, no?

More than 16 million barrels of domestic beer were sold in the US in July of this year, the last month for which data is available. Annual sales for the year to date are up 1.4%, the largest increase since 1990. What’s significant about 1990? The US economy was headed toward a recession then, too (assuming that you don’t believe that we are currently in a recession now).

In fact, a 1997 study by economists David Blake and Angelika Nied found that beer is “income inelastic” – that is, less income does not translate into spending less on beer. Good for the beer industry! That said, consumers are watching their wallets when it comes to beer, perhaps not buying less beer but looking for specials on their favorite brands and shopping more at mass merchandisers such as Wal-Mart.

Very telling is that “off-premise” sales of beer are on the rise as folks eat out less and cook at home; drinking a beer over dinner at home is less expensive than ordering out. Additionally, when diners do eat out, they may be passing up expensive cocktails in favor of beer which tends to be cheaper, even at the high end.

I’ll confirm that this is happening at our home. I refuse to switch to a beer that I don’t like in order to save a dollar. But with three children on our tab now, we are definitely changing our dining habits… On our recent trip to Maine, we bought several different beers to drink at our cabin. I cooked our evening meals rather than going out (we tended to eat out for lunch) and we would enjoy a post-dinner beer on the screened patio.

Perhaps beer historian (what a cool job) Maureen Ogle summed it up best:

Beer will get you through times of no money better than money will get you through times of no beer.

What do you think? How are your beer habits shifting?