State beer sales going flat

Per capita drinking lowest since 1947

Monday, June 14, 2004
By Bill Toland, Post-Gazette Harrisburg Bureau



HARRISBURG -- All this depressing talk about Pittsburgh's impending tax
increases and another losing season for the Pirates is enough to drive a person
to drink.

Jay Goldstein would welcome such a move -- provided you crack open a beer
instead of mixing yourself one of those fancy, fruity cocktails.

Goldstein, president of the Pennsylvania Beer Wholesalers Association, says the
state's beer industry is flagging just as badly as the city treasury and the
hometown ballclub.

State beer tax revenues were down by 5 percent for calendar year 2003, the
biggest single-year drop since World War II. Through this year, beer tax
receipts are down by an additional 3 percent.

Translation: Per-capita annual consumption of beer and malt liquor among
drinking-age Pennsylvania residents is less than 23 gallons a person, the
lowest consumption rate since 1947. The slide, Goldstein said, started in
February 2003 and has been continuing monthly since then.

But is that a bad omen for local brewers and distributors? Or just a one-year,
blown-out-of-proportion anomaly, exaggerated by an above-average sales year in
2002?

Depends on whether your pint glass is half-full or half-empty. Goldstein says
that while the state has been relaxing liquor and wine laws to allow for Sunday
sales hours and a grocery store presence, laws governing beer distribution in
Pennsylvania remain too strict.

"All we can do is stand there and get pummeled and lose more business,"
Goldstein said, cursing the Legislature on one hand while crediting Jonathan
Newman, chairman of the Pennsylvania Liquor Control Board, with reinvigorating
the staid spirits agency.

Goldstein, whose family owns beer outlets in Allentown, has his own motives for
highlighting the slumping sales. He's been lobbying the state to allow for the
sale of 12-packs at beer distributors, the theory being that a six-pack isn't
enough for a dinner party but a whole case is too much.

Demonstrating lower-than-usual sales could prompt rule changes at the
legislative level.

But Dick Yuengling, president of Pottsville's D.G. Yuengling & Son, said
Goldstein's sky-is-falling routine is one part truth, one part puffery.

"I think Pennsylvania had an off year," Yuengling said. "But it's just a blip.
It's happened before. We don't get excited -- we've been around for 125 years."

Either way, there's no denying that Pennsylvania beer-makers, as well as those
who distribute it, have spent the last few years fending off a confluence of
local and national trends:

A nationwide health kick, low-carb diets, took the beer industry by surprise.
Brand lines advertised as having low carbohydrate levels are gaining market
share, but the staying power of the Atkins low-carb diet could eventually have
a detrimental effect on overall beer sales.

The so-called baby-boomlet -- the sons and daughters of baby boomers -- are
exiting their prime beer-drinking years and approaching their 30s, an age when
many turn to more expensive wines and cocktails over beer and malt beverages.

Locally, the continuing decline in numbers of veterans clubs, social clubs
like the Elks and Eagles, and old mill bars means Pennsylvania is losing a
sliver of its reliable beer market each year.

And though his theory is unproven, Goldstein wonders if schools have
inadvertently bred a generation of kids, now drinking age, who prefer sweet
drinks to bitter ones. "When I was in school, you had a choice of milk from the
cafeteria or the water fountain," said Goldstein, in his 50s.

"Now, there's soda pop and fruit juice machines in every school," he said.
"We've developed a generation of wine and spirit drinkers," who prefer a Sea
Breeze to a Guinness.

That's a legitimate beef, reflected in the sales of "malternatives," those
sweet, fruity bottled drinks like Mike's Hard Lemonade. Popular since 2000,
such beverages initially didn't cut into overall beer sales because the drinks
were primarily produced by traditional brewers.

But now that hard liquor companies have gotten into the act -- Smirnoff Ice and
Jack Daniel's Original Hard Cola, for example -- brewers are feeling more of
the bite, even though those liquor-brand brews are still sold through beer
distributors, not liquor stores.

It all added up to a lousy year for beer in Pennsylvania, even as some of the
regional brewers are experiencing growing sales outside of the state.
Yuengling, for example, has been selling well regionally, especially since it
opened a second brewery in Tampa, Fla., five years ago and a third in St.
Clair, Pa., in 2001. Previously available in four states, Yuengling soon will
be sold in 10.

Even so, "I think certain markets are struggling," Dick Yuengling said.

That includes traditional beer strongholds, nationally and even worldwide. Last
year, beer sales in Germany were down about 5 percent from the year before, and
about 1 million fewer people visited the 2003 Munich beer festival, mostly
because Germans have become more health-conscious, according to a journal
called "World Drink Trends."

Meanwhile, Japan's major brewers took a major hit in 2003, with Sapporo's sales
dropping nearly 13 percent and brands Kirin and Suntory reporting declines of 7
percent, according to a recent report on the Japanese beer industry.

And in Britain, home to the smoky pub, beer consumption recently sank to a
30-year low, even as sales of wine shot up by nearly 9 percent and spirits
sales grew by 2 percent, according to a news report by the BBC.

Steve Kniley, spokesman for the Department of Revenue, acknowledged that
Pennsylvania beer sales have been flat for the last decade.

But viewed over a two-decade stretch, it's been a slow slide of small
decreases. From 1982 to 1990, Pennsylvania routinely took in more than $28
million in beer taxes, cresting at $28.9 million in 1990.

Over the last 10 years, the number has hovered between $25 million and $27
million.

Lately, Kniley calculated, "it seems to me it's been pretty stable. It's not
going up, but it's not going down a whole lot, either. ... They're drinking
about the same."

The slow slide in beer receipts stands in contrast to the great surge in liquor
and spirits sales in Pennsylvania. From 1994 to 2003, Pennsylvania's liquor tax
receipts have grown from $119 million to $193 million, according to the revenue
department.

The tax rates on both malt beverage and liquor have been the same for decades,
meaning the only variable is the amount sold. The malt beverage tax, commonly
called the beer excise tax, is 8 cents on the gallon, $2.48 on a barrel and
about a penny on the pint. The tax, in the end, is paid by the consumer, but
remitted by manufacturers, importers and distributors.

The liquor tax stands at a flat 18 percent.

Even though beer is taking a battering from liquor, many brewers say it's up to
the beer-makers, not the lawmakers, to adapt to changing consumer and health
trends. At Pittsburgh Brewing Co., the company's advertising campaign has for
about two years now been focusing on "more taste, less waist," and lately has
been touting I.C. Light's carbohydrate count compared to other light beers.

As a result, said Jeff Vavro, Pittsburgh Brewing Co.'s spokesman, I.C. Light
has seen increased sales for the last three years.

TOM KAN PA wrote...
State beer sales going flat

Per capita drinking lowest since 1947

Monday, June 14, 2004
By Bill Toland, Post-Gazette Harrisburg Bureau

What a joke. This reporter does all this research and comes to conclusions
that ignore the entire issue. And the issue, for those here who don't know
Pennsylvania liquor laws, is that state liquor laws were drawn up after
prohibition and haven't been overturned. You can't buy beer in a supermarket
or a convenience store. You can't even buy beer in a state/package/liquor
store. You can buy a case from a beer distributor, but not a bottle, six
pack, or twelve pack. You can buy a bottle or six pack from a bar or deli,
but not a case. Then if somebody proposes a plan to give Pennsylvania liquor
laws like every (actually almost every) other state, legislators from rural
areas make speeches about how any change in the law will turn the entire
population into alcoholics and the legislation gets shot down. Why didn't
any of this get mentioned in the article?

I'm not worried about the good beer market as I see more 15-30 tap bars
opening and it's become rare to go to a bar or restaurant that doesn't have
at least Sierra Nevada or Sam Adams. But if the businesses in the state are
worried about per capita beer consumption, then stop making it artificially
difficult to buy beer.

-Tom W

Todd Klondike wrote:
c (TOM KAN PA) posted message
on 14 Jun 2004
18:29:40 GMT
State beer sales going flat
snip

Not my fault. I'm doing more than my share.

Must be Lew's--I heard he's gone on the Atk!n$ diet.

But if the businesses in the state are
worried about per capita beer consumption, then stop making it artificially
difficult to buy beer.
____Reply Separator_____
Amen to that!

I noticed in the article the person pushing selling beer by the 12 pack does
not suggest that beer be sold in supermarkets. That would increase sales on
impulse especially to women who most of the grocery shopping. An ad runs on
TV and the person shopping remembers it, but cannot buy the beer because it
is not sold in the supermarket. Too much trouble to go to the distributor.

Also it seems that small local bars, where people can pick up a six-pack are
being replaced by chain type places where I never see a cooler to grab a
six-pack.

Tom
Uhhh...when's the last time you had difficulty buying beer in Pa?

Todd Klondike wrote:
(TOM KAN PA) posted message
But if the businesses in the state are
worried about per capita beer consumption, then stop making it artificially
difficult to buy beer.

Amen to that!

Uhhh...when's the last time you had difficulty buying beer in Pa?

Early May. Well, I had difficulty buying a *well-kept*
beer at Monks.
--
Joel Plutchak "Senza la birra tutto diventa orfano."
plutchak@[...] - Italian proverb (slightly revised)

Todd Klondike wrote:
"mary" posted message
on Wed, 16 Jun 2004
21:24:50 -0400
I noticed in the article the person pushing selling beer by the 12 pack does
not suggest that beer be sold in supermarkets. That would increase sales on
impulse especially to women who most of the grocery shopping. An ad runs on
TV and the person shopping remembers it, but cannot buy the beer because it
is not sold in the supermarket. Too much trouble to go to the distributor.

If going to the distributor is 'too much trouble', then you didn't
want a beer very bad, now did you?

A Libertarian's paradise! (Oy!)

Missing out on 'impulse buyers' hardly equals 'difficulty buying
beer'.

I'd say 'not being able to buy your beer where you buy your meat'
does indeed equal 'difficulty buying beer.' Beer is food.

Joel wrote:
Todd Klondike wrote:
[...]
Uhhh...when's the last time you had difficulty buying beer in Pa?

Early May. Well, I had difficulty buying a *well-kept*
beer at Monks.

Sweet!

Todd Klondike wrote

If going to the distributor is 'too much trouble', then you didn't
want a beer very bad, now did you?

Missing out on 'impulse buyers' hardly equals 'difficulty buying
beer'.

The only reason beer distributors exist is because of the post-prohibition
liquor laws which were supposed to keep organized crime (made up of former
bootleggers) out of the alcohol market. You can buy a case only from a
distributor and they spend a lot of money lobbying the legislature to keep
it that way.

Missing out on impulse buying does indeed equal difficulty buying beer in a
competitive marketplace. People who are shopping for dinner parties or
barbeques want to buy their food and drink at the same store. Consumers are
limited in the time they want to spend shopping and an impulse sale lost is
money spent on other beverages. Putting beer in supermarkets isn't a radical
idea - at least 48 other states do it (I'm not sure about Utah).

You're right when you say that if going to a distributor is too much trouble
then I don't want a beer that badly. I drink a beer or two almost every day
but I feel that I really need a beer maybe once a month. That means most of
my beer puchases are impulse buys and that can be the difference between
keeping a business open and seeing it close.

People on this list from Pennsylvania are from Pittsburgh and Philadelphia.
I assume that there really is a difficulty buying beer (especially good
beer) in other parts of the state.

-Tom W

Tom Wolper wrote:

Putting beer in supermarkets isn't a radical
idea - at least 48 other states do it (I'm not sure about Utah).

Wow, you really ought to get out more. There are a LOT of states
without beer sales in supermarkets (and, generally, one can say that the
better beer selections exist in such states). New Jersey and
Massachusetts sell beer in liquor stores, for just two examples of
states with great beer selections without supermarket sales. In fact,
as a beer lover, I HATE states where beer is sold in supermarkets (old,
exposed to light and poor selections).

I've said it before (and, granted, it might be an outdated reason) but I
think a major reason Pennsylvania had more independent breweries left
(and no majors to speak of) than any other state in the pre-micro days
was your system of beer sales.

wrote:
Tom Wolper wrote:
Putting beer in supermarkets isn't a radical
idea - at least 48 other states do it (I'm not sure about Utah).

Wow, you really ought to get out more. There are a LOT of states
without beer sales in supermarkets (and, generally, one can say that the
better beer selections exist in such states).

Generally?! You need to get out more. Beer selection
in (for example) Wisconsin and Illinois is great, and both
states allow beer sales in grocery stores. (Wine too, and
at least in Illinois spirits as well.)

In fact, as a beer lover, I HATE states where beer is sold in
supermarkets (old, exposed to light and poor selections).

Beer is also sold in "liquor stores" in IL and WI, and
there's nothing special about those wrt the condition of
the beer. IOW that's a straw man argument.

I've said it before (and, granted, it might be an outdated reason) but I
think a major reason Pennsylvania had more independent breweries left
(and no majors to speak of) than any other state in the pre-micro days
was your system of beer sales.

Per capita? Wisconsin may have given PA a run for its
money. And gosh, both states have large population with
German ancestry. But that wouldn't have anything to do with
it.
--
Joel Plutchak "Senza la birra tutto diventa orfano."
plutchak@[...] - Italian proverb (slightly revised)

Joel wrote:

wrote:

Tom Wolper wrote:

Putting beer in supermarkets isn't a radical
idea - at least 48 other states do it (I'm not sure about Utah).

Wow, you really ought to get out more. There are a LOT of states
without beer sales in supermarkets (and, generally, one can say that the
better beer selections exist in such states).


Generally?!

Yeah, generally but I should have said "I" instead of "one" and so I'll
say "Generally, *I'LL* say that I find it EASIER to find good beer in
states with beer sales NOT exclusively in grocery stores".


You need to get out more.

Yup, who doesn't?

Beer selection
in (for example) Wisconsin and Illinois is great, and both
states allow beer sales in grocery stores. (Wine too, and
at least in Illinois spirits as well.)

OK, we've now covered 4 states other than PA (Utah's still up in the
air- drove thru it once but don't remember the beer situation). I still
say the guy's wrong that ONLY PA and Utah don't sell beer in grocery stores.

In fact, as a beer lover, I HATE states where beer is sold in
supermarkets (old, exposed to light and poor selections).


Beer is also sold in "liquor stores" in IL and WI, and
there's nothing special about those wrt the condition of
the beer.

I can't figure out the typo "wrt" g BUT I'll make another "general"
statement. Beer sold in closed cases (as in PA) is generally going to
be better protected from light and easier to spot a date code on a case
than beer in open six packs on open refrigerated shelving as in a
grocery store.


I've said it before (and, granted, it might be an outdated reason) but I
think a major reason Pennsylvania had more independent breweries left
(and no majors to speak of) than any other state in the pre-micro days
was your system of beer sales.


Per capita?

No, total number.

Wisconsin may have given PA a run for its
money.

Yeah, they did but their total also had 3 or 4 or 5 of the largest
brewers (Pabst, Schlitz, Miller, Blatz and Heileman), and thus not
"independent" in the sense of regional and local brands. PA's locals
also had a broader spectrum of beers (still brewed porters and ales).

And gosh, both states have large population with
German ancestry. But that wouldn't have anything to do with
it.

I didn't say "The reason", I said a "major reason" and I'd say the
German ancestry had a lot more effect in Wisconsin than in PA.

Here's the deal in PA- You had to buy a CASE at a time and you
usually wound up buying it in the same store in town. The 25 or 50 cent
different in a six pack price of Yeungling versus Bud thus looked a lot
different when it's $2 or more a case. And the real bargain was in
buying it in deposit bottles and since you bought your beer at the same
place, deposits didn't seem as much a hassle and the local beers all
came in 12 and especially 16 bottles at prices that Miller and A-B
couldn't compete with. Yeah, things are different these days, the beer
market, the state's breweries, etc. (I don't know, could Shangy's exist
anywhere else, though?) but it's NOT the only state without grocery
store sales.

Todd Klondike wrote:
sleurB kciN posted message
Missing out on 'impulse buyers' hardly equals 'difficulty buying
beer'.

I'd say 'not being able to buy your beer where you buy your meat'
does indeed equal 'difficulty buying beer.' Beer is food.

So you're saying they should sell meat at the beer distributor?

Beer is food. Meat is not beer. Simple logic.
--
Joel Plutchak "Senza la birra tutto diventa orfano."
plutchak@[...] - Italian proverb (slightly revised)

wrote...


OK, we've now covered 4 states other than PA (Utah's still up in the
air- drove thru it once but don't remember the beer situation). I still
say the guy's wrong that ONLY PA and Utah don't sell beer in grocery
stores.

I stand corrected. I do remember "banquet beer" at convenience stores in
Salt Lake City, though, which is something you don't see in Pennsylvania.


I've said it before (and, granted, it might be an outdated reason) but I
think a major reason Pennsylvania had more independent breweries left
(and no majors to speak of) than any other state in the pre-micro days
was your system of beer sales.

There was some reason the nationals couldn't penetrate the market or at
least didn't try. When they did come in, that meant the end for a lot of
small brewers.


Here's the deal in PA- You had to buy a CASE at a time and you
usually wound up buying it in the same store in town. The 25 or 50 cent
different in a six pack price of Yeungling versus Bud thus looked a lot
different when it's $2 or more a case. And the real bargain was in
buying it in deposit bottles and since you bought your beer at the same
place, deposits didn't seem as much a hassle and the local beers all
came in 12 and especially 16 bottles at prices that Miller and A-B
couldn't compete with. Yeah, things are different these days, the beer
market, the state's breweries, etc. (I don't know, could Shangy's exist
anywhere else, though?) but it's NOT the only state without grocery
store sales.


I want to go back to the article that started the thread. It said that per
capita beer sales are declining in Pennsylvania. With all the reasons given
in the article, it was never mentioned the possible effect liquor laws had
on sales. If one assumes that the wholesalers and distributors want to
reverse that decline then they should want beer to be made more available to
consumers and that wasn't even mentioned in the article.

-Tom W

Todd Klondike wrote...

Missing out on impulse buying does indeed equal difficulty buying beer in
a
competitive marketplace.

Don't be silly. If you want beer, you go to where beer is sold.

Let's go back to the article that started this thread. It said that beer
sales are declining per capita in the state. I personally don't care that
they are, as long as I can find an imperial stout or marzen when I am in the
mood. The article isn't about good beer, though, it's about beer sales in
general. There was no mentin of market share for craft brews or imports but
I have a feeling (and if you can prove me wrong I will accept it) that the
decline is in macrobrews.

People who are shopping for dinner parties or
barbeques want to buy their food and drink at the same store. Consumers
are
limited in the time they want to spend shopping and an impulse sale lost
is
money spent on other beverages. Putting beer in supermarkets isn't a
radical
idea - at least 48 other states do it (I'm not sure about Utah).

I'm sure your count is off. All you've done is try to make a case
that it'd be more convenient if they sold beer on every corner. And
it would. But that hardly equates with 'difficulty in buying beer'.

Again, back to the original article: beer sales are declining. I am saying
that they would go up if beer were more readily available which is obvious
and was ignored in the article.

According to "Why We Buy" by Paco Underhill, 60% of purchases made are
decided on in the store. I am willing to make a special trip to a beer store
(distributor or specialty deli) just to get my imperial stout or marzen, but
my buying habits aren't the issue in the article. If you want to increase
sales, you have to put the commodity where shoppers will find it on impulse.


You're right when you say that if going to a distributor is too much
trouble
then I don't want a beer that badly. I drink a beer or two almost every
day
but I feel that I really need a beer maybe once a month. That means most
of
my beer puchases are impulse buys and that can be the difference between
keeping a business open and seeing it close.

Nonsense, of course. A beer or two every day is not impulse, it's
habit. Or, it could be addiction, but I'll be kind, as I apparently
drink more than you.

I am past my heavy drinking days, at least the binge years. If I'm at a
restaurant or party and macrobrews are all that is available, then I have no
problem going without. I don't suffer cravings.



People on this list from Pennsylvania are from Pittsburgh and
Philadelphia.
I assume that there really is a difficulty buying beer (especially good
beer) in other parts of the state.

I live in a small town about an hour outside of Philly. I have no
trouble buying beer. As much as I want. Since I am usually fast
asleep before the bars close, I can buy beer whenever I want, too.

Ya know what? I don't think having beer in the local minimarts is
convenient enough. I think we should demand home delivery! And
drive-through sixpack shops on every block.


I could have added Harrisburg to Pgh and Philly. In any case, I'm not
advocating beer on every corner, especially since the beer would most likely
be macrobrews. All I wanted to say is that if you are going to write an
article about declining beer sales in the state, you should mention that the
liquor laws provide a disincentive to consumers.

-Tom W