Blog: Chris Brook-CarterSpirited advance

Chris Brook-Carter | 11 November 2003

There were further suggestions this week that beer is losing share to spirits in the all-important US market. In a research note sent out by investment analysts Legg Mason, analyst Mark Swartzberg highlighted data that indicated that spirits have been taking share from beer for a period of years and that the trend has increased considerably in 2003.

“This is an unfavourable trend for beer, which we expect to continue. But we also expect beer to rebound over the next 12 months, returning to a much smaller decrement versus spirits growth,” he said.

The major factor, Swartzberg believes, is that the current generation of young adults drinks less beer per capita than prior generations, favouring spirits instead. He pointed to data from Miller Brewing, which estimates that the US population of 21- to 27-year-olds drinks 72% more beer than the average adult. However, this population's per capita consumption will decline approximately 1.1% per year for the period 2002-2007.

He also believes that the spirits category is less susceptible to adverse weather and potentially less impacted by a weak economy than beer, though both categories have similar exposures to the more economically sensitive on-premise sector.

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