Folks trade down and shift to house parties to get a buzz
by ilene - July 27th, 2009 6:49 pm
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Folks trade down and shift to house parties to get a buzz
Courtesy of Edward Harrison at Credit Writedowns
Alcohol used to seen as a recession-proof good. This downturn is changing that thinking as evidence of cutbacks in spending, consumption, and on-premise drinking abound. Back in the Spring of 2008, Nielsen conducted a bunch of surveys to see how the economy was affecting the consumption of wine and spirits. The answer then was it was not yet a major impact. The Blog “Wine & Spirits Daily” reported:
When it comes to wine, 49% said the economy has had “no effect” on the amount they spend, while 37% said “just a little” and 13% said “significantly.” With spirits, 48% reported “no effect,” while 34% said “just a little” and 17% claimed a significant difference in spending. Beer, meanwhile, had 47% of consumers reporting that their spending hadn’t changed, while 40% said “just a little” and 13% said “significantly,” according to Nielsen.
But, by January of 2009, the industry was reporting a change in dynamic. The Associate Press put out a story called “Is the alcohol industry recession proof?” which showed major impact being felt in the industry. The big change in behavior is what is called off-premise drinking i.e. carry-out beer, wine and spirits instead of drinks in restaurants and bars in order to cut costs.
Consumers are eating out less as they try to save money, and when they do go, Cressy said, they’re limiting what they order. On-premise volume fell 2.2 percent last year.
Instead, people are drinking at home and buying from stores.
Off-premise volume rose 2.9 percent for the year.
So people are drinking, but they’re paring back, said David Ozgo, the council’s chief economist.
The number of drinking occasions is falling; he said he wasn’t sure yet how much they were dropping.
"They still want to have a good time, so a certain amount of those drinking occasions will be shifted to at-home," he said…
And the beer industry isn’t recession proof either, figures show. Earlier this month, SABMiller PLC, the maker of Miller Genuine Draft and Peroni Nastro Azzurro, said its beer shipments fell unexpectedly in the most recent quarter amid a worldwide slump in consumer spending.
And I know this trend has continued. …
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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