Americans are drinking less beer and more liquor, but not in MN

Americans are drinking less beer and more liquor, but not in MN

The U.S. alcohol industry is a steady slow-growth market, but consumer tastes have changed since the dawn of the new millennium. That shift is illustrated in the following chart, based on data from the Distilled Spirits Council of the United States.

Here in Minnesota, that data doesn’t necessarily stand true. 

"I definitely think people are drinking more spirits. Especially health conscious people – less calories in a cocktail, many cocktails vs. a beer," said Jon Kreidler, chief officer of Tattersall Distilling. 

Tattersall Distilling produces all of their own spirits with mostly local inputs. In addition to Minnesota, their spirits are in more than 30 states throughout the U.S.

Down the road at 612 Brew, Robert Kasak, co-founder says his business is booming, as well (unlike what the data from the Distilled Spirits Council suggests).

"I haven’t seen a slowdown in craft beer because more and more bars and restaurants are asking for craft beer," Kasak said, who also attributes his success to millennials. "Maybe 10 years ago those guys were drinking rail whiskey and cheap craft beer, but now these 21-year-olds are buying craft spirits and craft beer.”

The council attributes the growth of spirits to millennials, who are drinking more whiskey instead of beer. That shift helped boost total shipments of spirits by 2.4% to 220 million cases in 2016.

That change is encouraging for leading spirits makers like Diageo (NYSE: DEO), the maker of Johnnie Walker, and Brown-Forman, which sells Jack Daniels. But it's less encouraging for beer breweries like Anheuser-Busch InBev (NYSE: BUD) and Molson Coors, as they're already struggling with a market shift away from their mainstream brands toward craft beers.

Investors should expect more market consolidation, like AB InBev's takeover of SABMiller for over $100 billion, as well as acquisitions of popular craft beers and high-growth spirit brands (Diageo's recent purchase of George Clooney's Casamigos tequila brand is one prominent example). There will also be continued emphasis on premium brands across the industry.

© 2017 USATODAY.COM


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