Sure budget beers got a boost, but is the economy the real culprit?

by Mike Pomranz, Posted Nov 6th 2008 @ 10:00AM

Ah, the economy. You can blame that sucker for anything. A recent article in Advertising Age suggests that the recent economic downturn has caused a significant uptick in the sales of budget beer brands such as Miller High Life, Keystone, Busch and Natural Light.

But I'm skeptical. Sure, a suffering economy will send people looking for ways to save, but Miller High Life was boosting advertising and making sales strides well before the market crashed. And uber-underdog budget brand Pabst Blue Ribbon exploded back from obscurity over the course of nearly a decade.

Economy aside, here are two other reasons that may explain the recent surge in the budget beer sector:

Read the reasons after the jump...

1) Much like PBR established a model for anti-marketing, many of these ignored beer brands are starting to attain a similar level of cachet. As the choices within the market have both expanded and evolved, drinkers are revisiting these forgotten brands as part of a newfound environment of experimentation and anti-commercialization.

2) Beyond market changes, the recent craft beer revolution has changed Americans' perceptions of beer itself. As drinkers become more educated, they're beginning to realize macrobrewers' "premium" products are less distinct and "premium" than they previously thought. If you're not going to spend the money for an imported or craft brew, why pay a premium price for a "premium" beer that taste and quality-wise isn't that far removed from the same brewer's budget brand?

Personally, if I'm going to grab a beer just to grab a beer, I'll choose the cheapest beer in the bar over a Budweiser any day of the week. Why would I pay more for one bland lager over another? More and more, I see drinkers going out with this idea in mind: I'm either going to get a great beer or go with the cheapest one they got.

Ad Age's article quotes one MillerCoors wholesaler who laments that consumers are "trading down." Maybe soon the big boys will wake up and realize the irony of being outmoded by their own product.

And certainly a bad economy will only exacerbate the trend.

[Photo Credit: anheuserbusch.com]

Filed Under: Business, Trends, Drink Recipes
Tags: beer, budget beer, Miller High Life, pabst blue ribbon, premium beer

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Reader comments (Page 1 of 1)

11-06-2008 @2:35PM Shail said... Not to mention there are a lot more students going to college, enrollment is at an all time high, and we can't afford premium beers. You see a lot of cans of Natty Ice on college campuses.
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11-06-2008 @2:46PM foxdude0486 said... Yup, now that the economy is falling and I'm trying to pay off credit cards, I've gone from spending $1.50 a 12oz or $7-9 for the 1pt .9oz bottles down to the .50-.70 12oz cans in 12 and 24 packs. Not to mention they save space and are light and crushable for recycling. Amberbock does come pretty cheap when bought in bulk and is good for its price range.
www.beersuggest.com
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11-06-2008 @4:39PM Red Icculus said... Like the old cliche goes, "It's the economy, stupid." My sales are up 4%, but my sub-premium category sales are up 15%. That means people are spending their beer dollars on lower quality beer.
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11-06-2008 @5:09PM Chrissy said... I'm in college.

We drink Natty Light. Or, if times are really tough...Lionshead or Schaefer.

When I do have extra cash, it's Miller Lite. Or...when I'm like, REALLY rolling in it...Michelob Ultra :)
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11-06-2008 @5:18PM Mike Pomranz said... Ha. Chrissy, if you think Michelob Ultra is money well spent, maybe you should consider taking an elective in Malting and Brewing Science. Hopefully you attend UC Davis, right? :)

But seriously, maybe I'll do a follow up article on good beer bargains...
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