Big beer brands in the US have plenty of room for innovation, according to Trevor Bernstein

Big beer brands in the US have plenty of room for innovation, according to Trevor Bernstein

Major beer brands in the US have been "asleep at the wheel" for the last 20 years and it will take years of innovation for them to recover, an analyst has argued.

Speaking at a seminar on beer, hosted by analysts Bernstein Research last week, Trevor Stirling said that the tastes of young male beer drinkers are now "skewed towards cold, fruitier, sweeter drinks". In the UK, cider has filled that role, he said. 

But, for the US, Stirling said: "Big beer has really been asleep at the wheel for 20 years in ignoring that trend. Their biggest competitors weren't each other, their biggest competitor was spirits. 

"They get that now and things are changing, the mindset is changing. But, it will take years of innovation to address those issues." 

However, he pointed out there is "4% top-line growth" for beer int he country and "still some some good things about beer in the US". "The pricing environment is now very strong, you have two big brewers now, where you used to have three," he said. 

Later, during a Q&A, Stirling defended the beer category from a global perspective. "The image of beer is one of a dull, commoditised, captial intensive category with low growth," he said.

"But it's not, when you look at it globally. It's certainly not in the emerging markets. You see high growth, high return on capital - 40% on EBIT margin. Most FMCG companies would cut your throat to have a 40% EBIT margin."

He added: "The future of the industry is moving away from 'I'll have a pint of lager please' to something that's much more brand-driven and much more consumer-orientated than was the case ten years ago. The great thing is, because it was so badly run, there's so much room for improvement."