Overall beer consumption in the US hasn’t changed much since 2000. Data from Rabobank shows that 23.5bn liters of beer were consumed in the US in 2000, and 23.459bn liters were consumed in 2017.
However, what types of beer people are drinking has evolved. Domestic beer used to make up 87.7% of total consumption in the US, and it fell to 67.6% in 2017. Foreign and craft beers together made up just 12.3% of US consumption in 2000, and has now increased to 32.4%.
US consumers are trending away from abundantly available domestic brews and are reaching for foreign imports instead. Instead of Budweiser, Heineken and Coors, people are choosing Corona, Modelo and Dos Equis.
The same trend is true in China, except they see Budweiser as a desirable foreign beer, more expensive than their local Chinese options. It’s something that is mirrored in all major beer drinking countries like Mexico, Brazil, the UK and Germany. Domestic beers are declining while craft and foreign beers are increasing.
Imports win out
Francois Sonneville, senior beverages analyst at Rabobank, identifies four primary reasons for this shift in a recent report for RaboResearch.
Migration has increased globally, and with it, beer options have expanded. People want what they had back home. Similarly, when people return from traveling on vacations, they want to bring home a piece of that trip. Many Brits now travel abroad to Spain, leading to an increase in Spanish beer imports.
“Whether it is nostalgia for a beer drank back home or on holiday, or a longing for a product with authenticity of a country far away, consumers see foreign beer as a premium product,” Sonneville said.
It also has to do with how brands are positioned globally. The two largest beer brewers in the world are AB InBev and Heineken, and they have the global presence and capabilities to invest in many markets at once. This allows them to succeed and turn a profit in unlikely places like China where smaller brands typically cannot compete.
Finally, consumers are now more savvy with their food and beer pairings--likely to want to drink an Indian beer with Indian food. It’s all a part of the premiumization trend that drives consumer demand for foreign imports in the first place. Drinking an Irish beer with sushi may not pair well, leading to a need for more beer options.
What to watch
Sonneville acknowledges that the explosion of craft beer is slowing down, but expects the decline in US consumption of domestic beer to still continue.
As for China’s interest in American beers, it is also likely to continue to grow. Sonneville reports that China’s young adults are earning a record-breaking disposable income, making them much richer than their parents were at the same age. This means they can upgrade from cheap Chinese beer to the more expensive foreign imports.
“If we look at China developments [from] 10 or 15 years ago, beer consumption started to rise, but profit was low. A lot of brewers were not interested, which is similar to what you see in other southeast Asia countries,” Sonneville said.
He points to Africa as another market that could follow a similar pattern. For now, foreign beer consumption is quite low, but as people get wealthier they will have to work less to afford a beer. Sonneville predicts that over the next 20 years there will be a lot of volume growth in southeast Asia and Africa as has been seen in China.