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Who doesn’t love throwin’ up their feet and crackin’ open an ice-cold beer?
Turns out, a growing segment of the population.
Driving the news: Alcohol giant Diageo is looking to exit the ice-cold—and not in a good way—beer biz, with plans to divest all of its beer brands except Guinness, per Axios.
- Beer accounted for a meagre ~14% of Diageo’s total sales last year, while its stacked spirits lineup—Smirnoff, Crown Royal, Ciroc, etc.—accounted for ~81% of sales.
Why it matters: Beer is slowly losing its drink dominance to seltzers, spirits, or straight-up sobriety. The sudsy stuff is still Canada’s top alcoholic drink, but sales fell to record lows last year. Monthly stats signal that sales are on track to drop even further this year.
- The picture is more dire in the U.S., a nation famous for its love of brewskis. This year, for the first time, spirits eclipsed beer’s U.S. alcohol market share.
Yes, but: Beer is hurting, but it’s far from dead. Well-diversified industry leaders with hundreds of brands will likely weather the storm as they can respond to changing tastes. Ultimately, it’s mid-sized craft brewers that are likeliest to be squeezed out by beer’s decline.
- Craft brewing has boomed over the past decade, but the industry is set to contract as breweries face rising operating costs, loan repayments, and a glut of competition.
- Plus, many breweries know if they raise prices, they’ll lose customers. One expert told the CBC that up to 20% of Canadian craft breweries could close next year.