According to The Chicago Tribune, alcohol sales have climbed with little interruption throughout the recent recession, and have not slowed down in recent months.
This sales expansion is most likely as a result of the stagnant job market, proving the old adage true–that the booze industry survives in a recession because people drink even when they’re broke.
“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.”
Alcohol beverage sales grew by nearly 10% during the 12 months ending May 31, according to financial information company Sageworks, even though the average unemployment rate during that time exceeded 9.3%. In 2008, sales expanded more than 9%, the full first year of the recession, when the average unemployment rate was 5.8%. Sales decreased dramatically the following year, but were still 1% higher, as the unemployment rate increased to 9.3%.
“These numbers grew almost in spite of the recession,” said Sageworks analyst Sam Zippin, noting health care was the only other industry to maintain growth through the recession. “Other than going to the doctor, alcohol is another need to have.”
Sageworks also found that despite the recession, retailers, wholesalers, and bars experienced growth, with wine, spirits, and high-end craft beers maintaining progress. The losers, however, appear to be the so-called “legacy beers,” including iconic brands such as Budweiser.
“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, or they’re going to craft beers.”
Craft brewers are especially benefiting from the local loyalty of their consumers, who are willing to pay extra to not only support the independent brewers in their own communities, but want a product that is different and better than the mainstream.
“The brewers are doing their part by putting out interesting quality beers,” said Paul Gatza, director of the Brewers Association in Boulder, Colorado. “The consumers are doing their part by supporting local companies. Retailers are adding shelf space for craft brewers. It seems like things are running on all cylinders.”
