Beer industry hopes Memorial Day weekend will kickstart sales

A lagging beer industry hopes a strong Memorial Day weekend can help make the glass look half full again.

So far, 2018 has not been kind to beer-makers, in part because of the uncooperative weather. When the sun is blazing, beers are swilled on golf courses, boats and patios across the country. But after a chilly start to the year, particularly in the Midwest, domestic beer shipments are down 2.7 percent through the first four months, according to the Beer Institute, the trade group representing the largest beer companies in the U.S.

“People have been dying for spring to start . ... The industry needs a good weekend, badly,” said Eric Shepard, executive editor of Beer Marketer’s Insights, a trade publication covering the beer industry.

Beer has other challenges beyond the weather. American light beers _ led by the top-selling Bud Light, Coors Light and Miller Lite _ have been in decline in recent years. The craft beer boom is slowing down. And as it has for years, beer continues to lose share to wine and spirits as millennials, in particular, have eschewed cheaper mainstream beers for more premium beverages across categories.

Beer’s share of alcohol sales peaked in the mid-1990s, Shepard said, and has since been on the slow decline. In 2001, beer still represented more than 58 percent of the total volume of alcohol sold in the United States, according to data from Beer Marketer’s Insights. Last year, beer’s share was about 49 percent, with both spirits and wine making gains.

Spirits, driven by the growth in whiskey, will continue to gain share both in the United States and globally, according to research from Moody’s Investor Service.

“Young people are not necessarily drinking less, but different. More premium and more variety _ with spirits the real winner from an age group that used to drink mostly just beer,” said Linda Montag, senior vice president at Moody’s, in an email.

Add in the weather and the industry’s off to a more sluggish than usual start this year. Giant beer companies such as Anheuser-Busch InBev and Molson Coors _ parent company of Chicago-based MillerCoors _ noted the impact of weather in explaining recent quarterly sales declines.

"Beer demand is very responsive to weather, especially in the spring and fall,” said Michael Uhrich, chief economist for the Beer Institute.

For example, a 10-degree drop in April _ the difference between 50 and 60 degrees _ has more of an impact on beer-conducive outdoor activities than a 10-degree difference in July, Uhrich said. Memorial Day weekend and the summer months that follow will be “critical” for the industry, he said.

None of these challenges are new for Dick Leinenkugel, president of the Wisconsin-based Jacob Leinenkugel Brewing Co. that’s owned by MillerCoors. Leinenkugel Summer Shandy and Grapefruit Shandy _ both warm-weather beverages _ comprise about 65 percent of total Leinenkugel sales.

Leinenkugel’s Summer Shandy is coming off a record year in 2017, when it sold almost 500,000 barrels in just six months. This summer, the brand could get a boost from its new 24-ounce cans, a popular packaging format. But so far the brewer, like the rest of the beer industry, is finding sales are down compared with last year and making up the difference will be tough, Leinenkugel said.

"You’re not going to get those occasions back,” Leinenkugel said. “If you lose a month at a golf course, they’re not going to add those lost rounds back,” Leinenkugel said.