Is beer becoming less popular?

Beer is one of the most popular beverages in the world, and holidays such as St. Patrick’s Day act as a reminder of the cultural importance beer has around the globe.

For London- based Diageo, which owns the Guinness brand and has turned it into a worldwide favorite, March 17 is an important day. About 13 million pints of Guinness beer were consumed on the holiday — three times the ordinary run rate for the Irish stout.

Yet when you look more broadly at beer consumption throughout the year, the picture doesn’t look as strong. Even with a generally successful brand like Guinness, there have been obstacles to growth that have shown up recently. Organic volume of the beer brand’s sales has fallen four of the past five years. There are several factors potentially at play. One is that the rise of craft brews has disrupted the usual brand loyalty among beer drinkers, instead leading many consumers to favor a wider selection of beers. In addition, a newemphasis on spirits in the marketplace has shifted consumer tastes away from beer toward hard liquor.

Companies in the industry are responding accordingly to keep up with changing consumer trends. Diageo, in particular, has seen growth in spirits brands such as Tanqueray gin and Crown Royal whiskey, which saw volume increases of 12% and10%, respectively, in 2017. Beerwon’t disappear overnight, but its past dominance at the local tavern might slowly give way to a broader menu of adult beverages in years to come.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Diageo.