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A Slice Missing

A regular Bulletin reader (thanks Ben) sent in a link to a short blurb that was in the San Francisco Chronicle on Friday. It was by wine business writer Cyril Penn, who also publishes Wine Business Online. Titled “Regular domestic beer loses its grip on U.S. market” it details another Mintel International research effort. The company does market and consumer research on a large scale around the globe and about big industries. So it’s not surprising they’d leave out an entire sliver of pie in their chart.

The new Mintel study claims that although “American light beers” (low-calorie diet beers) are showing growth, “domestic beers” are not. But by domestic, which should be all beer made within the United States, Mintel means only beers from the large manufacturers, such as Bud, Miller and Coors.

More findings from the Chronicle article:

Volume sales of imported beer have increased 27 percent over the last five years. In contrast, regular (non-light) domestic beer posted a 19 percent decline during the last five years.

According to Mintel’s research, only one quarter of American adults over age 21 drink regular domestic beer, a decrease of 15 percent since 2001.

The Mintel reasearch also found that the “light beer segment is the only domestic segment to gain sales over the last two years, growing 4.8 percent in volume.” Of course, that leaves a bit of the pie chart missing, specifically the craft beer segment, which has shown 11% growth through the first half of last year and 9% for 2005. It may be a small slice, but it is getting bigger. And that means the “light beer segment” is not the only domestic segment growing over the last two years. But that’s the way it is with the business press. Only the big, publicly traded multi-nationals are in their radar. For the craft breweries, the money just isn’t enough for them to talk about, except for a few exceptions like Boston Beer and Sierra Nevada.

And that’s fine if it’s business to business who’s utilzing this information. If one business is looking at this data and using it for their business decisions, then the limitations of the information doesn’t make much of a difference. For example when I was the beer buyer at BevMo, I regularly looked at IRI and Nielsen sales data. In both cases, they collect sales of beer at grocery stores, drug stores, big box stores, convenience stores and other mainstream sellers but ignore direct sales, independent liquor stores, and all sorts of non-chain store sales. That doesn’t make them useless, just incomplete. But knowing their limitations can still give revealing insights and show trends. They give a glimpse of what is happening to a certain portion of the market.

The problem is when that sort of limited research data is reported to the public in a news item without discussing those limitations. It gives the impression that the information is complete, reliable and unbiased. So when Penn’s little piece says that only light beer is growing, he’s not wrong insofar as the Mintel research data he’s reporting on, but that data itself is flawed in that it is not presenting a true picture of reality. It’s not meant to, it’s intention is just to show a very specific snapshot of the major portion of the industry. But as the headline suggests, all American beer is down, losing to imported beer. Maybe I’m not giving the general public enough credit, but how many people know the term “domestic beer” in this context is jargon for just the non-low calorie beers, the regular American light (in color) lagers manufactured by the big and traditional beer companies. They represent just a few handfuls of brands which mostly ignores almost 1,400 craft breweries and thousands of individual beers. And while “domestic beer” represents a large percentage of the total volume for beer sold in the U.S., it’s still not all the beer produced domestically. The stuff I — and hopefully you — love is growing again with wild abandon, and has been for a few years in a row. That’s a much rosier picture than the Chronicle’s piece suggests, at least for fans of the wonderful non-domestic beers made here in America, better known as craft beers.

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