The Beer Wars Enter A New Phase?

Update at the end of the post based on an expanded look at the findings.

Union, a company that offers a POS system and also tracks sales in the alcohol industry*, sent me some findings of recent research they’ve done on consumer behavior following the Bud Light incident. My sense is that their approach is a poll of real time purchases at actual retail accounts across the country. Like a poll, it’s a sample of retail outlets, not a measure of total actual sales. I know I’ve been talking big beer a lot lately, but it’s because this may be one of those hinge moments in the beer industry when a major shift is taking place. I’m interested in it as much as a story of American consumption as a beer story. For decades, beers with the name “Budweiser” have been the best-sellers. Beer as a category is in decline, and appears to be entering a permanent shakeup.

Before we get to the findings, let me emphasize that these are sales in bars and restaurants. I assume that means the majority are draft sales, but Union didn’t provide a breakdown. The vast majority of sales happen at the grocery store, so this is a snapshot of one channel—and it helps explain why some of the results differ from headlines you may have been seeing.

In the accounts it follows, Union found that Bud Light slipped from the top spot to fourth in Q2; Miller Lite took the top spot, followed by Michelob Ultra and Coors Light. (If you expected to see Modelo in the top spot, stay tuned.) Corresponding with news about the larger beer market, Bud Light’s “sales at Union’s high-volume bars and restaurants stabilized somewhat in June.” The erstwhile king fell like a stone in April and May, but seems to have finally flattened out, albeit in a diminished state.

Now, back to that Modelo news. Where did the Bud Light drinkers go? Curiously, the biggest shift went to Guinness. The differences are slight: of all the switchers, more than 3% went to Guinness, while 2.7% went to Modelo. Reports Union: “Guinness saw the strongest dollar sales share growth of all imported beers in Q2. While Modelo has been widely reported as the new king of beers in the off-premise channel, our data reveals that guests are gravitating towards Miller Lite and Guinness in lieu of Bud Light when going out.”

Finally, Union found that Bud Light sales fell the most in the Carolinas and Texas and the least in California. This would seem to undermine my argument that Bud Light was likely seeing declines by social conservatives and pro-LGBTQ drinkers. Given that this is a sample of outlets rather than than all on-premise accounts, this could be a sample bias issue—or reflect greater anti-Bud intensity on the right. It would be interesting to see a more focused study on the intersection of identity, politics, and beer consumption, but these numbers will have to do.

In any case, the results are intriguing. Guinness has quietly been doing well for months, long before the Dylan Mulvaney incident. The brand may be receiving a new look by consumers who are rethinking their beer choices for the first time, or possibly getting the benefit of “safe harbor” switchers. For over a century, Guinness, a longtime sponsor of this blog, has cultivated a very specific, genial brand that could only divide haters of toucans or tourist-board Irishness. In a world where Bud Light and Modelo may be seen as political statements, Guinness might be looking like a neutral alternative. (Diageo, Guinness’ parent company, has long been praised for its diversity and routinely supports LGBTQ causes—but seems to understand the difference between empty performative gestures and real engagement.)

Anyway, food for thought as we watch big beer reshuffle for the first time in a very long time.

Update. Union has posted more of their info online. On the issue of declines, we have one of those “damn lies and statistics” situations. While it’s true that the Carolinas saw the largest dip in absolute percentages, part of that has to do with the enormous market share Bud Light enjoyed there. Sales fell 6.9%, from 19.4% to 12.5%. In other words, Bud Light sales dropped 35.6%. Contrast that with Oregon, the second “least-impacted” state, which fell from 5% of total beer sales to 3.2%, a drop of just 1.8%. Yet that represents a nearly identical percentage drop in the state of 36.0%. Watch your denominators, folks!

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* Union, according to its own description, is a “hospitality engagement platform leveraging industrial-grade data intelligence to deliver transformative experiences for guests, operators, and brands at the most popular venues across the country.”