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Beer, A Reflection Of The World Economy?

testosteronepit's picture




 

Wolf Richter   www.testosteronepit.com

Good news first. Despite the financial crisis, the Eurozone debt crisis, the housing collapse, the endless series of taxpayer-funded or central-bank-engineered bailouts, and despite various bubbles inflating or blowing up, worldwide beer production has increased year after year. In 2011, it rose by another 60 million hectoliters to 1.9 billion hectoliters (1 hectoliter = 26.418 US gallons), and was a very respectable 38.3% higher than in 2000, according to the annual beer and hops report by Barth-Haas Group.

 

The bad news was regional. In most developed countries, production dropped. In the US, it edged down 1.6% last year and 5.7% since 1990—despite a significant increase in the population. In Germany, it stabilized recently, but had plunged 20.5% since 1990. Production in the UK had skidded 27.5% during that time, though it ticked up last year. No glimmer of hope for Japan: production is down 14.7% since 1990, and down 3.6% from 2010, the seventh straight year of declines. Only 442.39 million cases were shipped, the lowest ever in recorded Japanese beer history.

But Asia was on a tear. Well, except Japan. And India, the only major country that hasn’t yet discovered a taste for beer. The driver in worldwide beer production growth was China, up 9.3% in 2011, and up an astonishing 600% since 1990. Of the 60 million hectoliters in growth worldwide last year, 42 million where brewed in China. Vietnam made huge strides; in percentage terms a 2,680% melt-up since 1990. Beer production also grew in Africa and Latin America.

Russia is a special case: in the Soviet Union in 1990, beer production was zero (the chart below shows the percentage increase since 2000). By the time I went to Russia in 1996, Russian beers and Heineken were available, but hard to find in smaller towns or on trains, though vodka (served in water glasses or by the bottle) was everywhere. Since then, Russia has shot up to third place in beer production, knocking off Germany and a slew of other countries, only to get itself knocked off by Brazil last year. Production tapered off, not because of a decline in per-capita consumption—it’s still increasing despite a government crackdown on alcohol consumption—but because imports are making some headway.

 

 

When I was a kid in Germany, I engaged in what in the US would be considered underage drinking. I was too young to drive, and so it didn’t bother anyone, except me the next day. It was the time when German beer consumption peaked at 151 liters per capita, the highest in the world. But then I went to America ... and German beer consumption began a multi-decade decline that may finally be leveling off at 107 liters per capita. Enough for a second place in 2010, but not in 2011, when Austria knocked Germany down to third place.

Within any country, there are regional differences. But they’re particularly strong in Germany. Bavarians are still swilling it at a rate of 155 liters per capita, whereas Germany’s wine regions are down to 69 liters, an outright scandal. My grandfather, who was born and raised in the Kingdom of Bohemia, which was part of the Austrian Empire at the time, and is now part of the Czech Republic, would turn over in his grave.

Today, the Czech Republic and Austria are the top two beer-drinking nations in the world with 143 and 108 liters per capita respectively. By comparison, in the US, we drink 75 liters per capita, on par with Russia.

Note the last country on the list: India. 2 liters per capita! Just imagine Asian beer production if India’s 1.2 billion people discover—unlikely as this may seem—just how good a cold one can be after a hard day at work, or with their favorite meals!

Every beer has a right to exist. Tastes vary, and one guy’s favorite brew is the next guy’s window sweat, as my uncle used to say. A while ago, I handed a California IPA, one of my favorites, to a friend of mine, who then told me that its flavor was reminiscent of rusty nails. So it goes. But in 2011, 51.8% of the world’s beer was produced by six mega-brewing groups. 

It’s getting worse: in June, ABInBev announced that it would acquire 7th ranked Grupo Modelo, giving the company a 21.5% share of the worldwide market. Without further acquisitions, the top six will brew 54.7% of all beer in 2012. But the more these mega-groups acquire each other, and the more they produce the same stuff, the easier it is for scrappy outfits with extraordinary beers to elbow their way into the market.

Germany still has about 1,250 breweries, a far cry from the many thousands it used to have—but almost four times as many as in the rest of the EU combined. They range from brewpubs to mega breweries. About half of them are in Bavaria. And they sport about 5,000 brands, some of which are truly awesome, and they're doing well.

In the US, the industry has been more than morose, with mega-brewers battling each other tooth and nail over declining sales. And yet there are astonishing winners. Read.... The Beer War on American Soil.

 

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Tue, 07/31/2012 - 10:40 | 2665020 supermaxedout
supermaxedout's picture

Besser en Ranzen fum saufen, als en Buckel fum schaffen.

Better having a belly from drinking, than having a hunchback from working.

 

Tue, 07/31/2012 - 08:49 | 2664622 edifice
edifice's picture

"And India, the only major country that hasn’t yet discovered a taste for beer."

Nonsense. Flying Horse is awesome!

Tue, 07/31/2012 - 08:25 | 2664554 Dien Bien Poo
Dien Bien Poo's picture

i live in Burlington Vermont, the home of Magic Hat and the state of various other brews and Vodkas. I can tell you with confidence that not only are we brewing and drinking up a storm, but that our micro economy is doing just fine. Colleges, tourism and a spattering of world class companies like Green Mountain coffee, Ben and Jerrys, Dwight Asset Management and others are providing the locals with jobs, hope and of course much beer.

Come visit us, we will teach you to ski, fish, sail, hike, kayak, climb, chill and of course drink. We can even offer you a job. we have loads although ill admit they are heavily slanted in healthcare, insurance, Technology and year round tourism. 

Ps. i just found out that Goldman Sachs bought Dwight AM. The dream is over.

Tue, 07/31/2012 - 04:06 | 2664302 falak pema
falak pema's picture

the european world and its spawned colonies divide into two : those who drink wine and those who drink beer. 

And these cultures are now increasingly universal. Much as I like a cold glass of beer with mussels and fries I stay a wine drinker for my every day food culture life. 

From a health viewpoint the grape and the olive epitomise south european cooking and way of life. 

It will be interesting to see how the world will evolve in terms of food culture over time. Something tells me that oriental spice and aromatics tradition coupled with mediterranean paradox of olive oil and wine cooking/eating will provide the best blend of antioxidants and omega type elements to nurture our bodies. 

Santé! 

Tue, 07/31/2012 - 03:29 | 2664282 forrestdweller
forrestdweller's picture

i advise everyone who likes beer to visit south and central germany once. every city has it's own beer, and these are the best ones you can have.

Tue, 07/31/2012 - 09:00 | 2664661 flapdoodle
flapdoodle's picture

I'll never forget my trip to a small town in Bavaria called Memmingen about 20 yrs ago - fresh beer, fantastically good, was delivered to the shops and pubs early in the morning in carts, like fresh milk used to be...

Tue, 07/31/2012 - 04:07 | 2664303 falak pema
falak pema's picture

belgian trappist beer is awesome.

Tue, 07/31/2012 - 02:41 | 2664250 ebworthen
ebworthen's picture

Prost!

Some fine U.S. Microbrews, higher alcohol content and more malt so you drink less.

Miller High Life is my go to brew for a good cheap refreshing cold one.

Augustiner (Germany), Fosters Lager (Australia), and Samuel Adams (U.S.A.) excellent full bodied brews.

Liquid bread!

The economy still sucks (depression) but at least there is beer.

Tue, 07/31/2012 - 02:10 | 2664231 dogbreath
dogbreath's picture

Have any of you guy been to Terrace BC.  Its a quaint little drinking village with a fishing problem.

Mon, 07/30/2012 - 23:49 | 2664129 Venerability
Venerability's picture

Maybe people are simply getting more sophisticated.

Beer from bottles or cans is undrinkable, IMO.

Brew pubs which make their own beer - and give you terrific variety to boot - are miles above what the commercial brewers put out. Literally an entirely different beverage.

 

Tue, 07/31/2012 - 01:36 | 2664217 AldousHuxley
AldousHuxley's picture

http://www.youtube.com/watch?v=HoRZ3-OAidM&feature=relmfu

 

Hear from poor communist country about what's wrong with America and "capitalism"

Mon, 07/30/2012 - 23:11 | 2664085 krispkritter
krispkritter's picture

I'm all for imbibing but these fucktards take the cake and then want to eat it too...

http://blogs.villagevoice.com/runninscared/2012/07/megan_merkel_up.php

http://imageshack.us/photo/my-images/826/merkle.jpg/

They give drinking a bad name...

Mon, 07/30/2012 - 22:55 | 2664069 bigwavedave
bigwavedave's picture

People only drink cold beer because it really tastes and smells like baby puke. Try it and see for yourseft. Crack open a room temperature Heiniken or Carlseberg or whatever.

Mon, 07/30/2012 - 23:00 | 2664072 Piranhanoia
Piranhanoia's picture

Beer was invented before refrigeration, and many nations don't keep it cold.  I asked for a cold one in Germany and they knew I was strange.

Tue, 07/31/2012 - 02:42 | 2664251 cbxer55
cbxer55's picture

I don't think Mr. Nobody was drinkin it cold here.

http://www.youtube.com/watch?v=lFFTCIbhF70

Mon, 07/30/2012 - 22:53 | 2664064 FieldingMellish
FieldingMellish's picture

Looks more like demographics to me. Outside of a strong cultural bias, countries with aging popluations drink less beer (and probably more wine).

 

PS It t'aint real unless its ale!

Mon, 07/30/2012 - 20:06 | 2663803 JimmyCDN
JimmyCDN's picture

Beer review blog worth checking out:

 

http://leapbeer.wordpress.com/

 

 

Mon, 07/30/2012 - 20:08 | 2663802 JimmyCDN
JimmyCDN's picture

DP

Tue, 07/31/2012 - 07:58 | 2663793 Meesohaawnee
Meesohaawnee's picture

i guess ya gotta be buzzed to trade this market..

Mon, 07/30/2012 - 20:01 | 2663791 grunk
grunk's picture

So we haven't reached peak beer?

Cheers to the Czechoslovakians for their stamina. Cheers to the Vietnamese for their ambition.

Mon, 07/30/2012 - 17:07 | 2663485 Whoa Dammit
Whoa Dammit's picture

I knew is was all over for the US when Anheuser-Bush was sold to the Belgians back in July 2008. Its not that I have anything against Belgians, and its not that I like Anheuser-Busch products very much, but its becuase Budweiser was such an American icon that the sale seemed to be the final nail in the coffin of America as I knew it.

Tue, 07/31/2012 - 08:55 | 2664638 flapdoodle
flapdoodle's picture

Yeah, lets have some of that modern Budweiser real American beer... not like that old Czech stuff called, errr, Budweiser

 

 

Mon, 07/30/2012 - 21:22 | 2663918 A Nanny Moose
A Nanny Moose's picture

Belgians can keep the Horse piss Bud. Variety is the American icon. This is the age of craft brewers, and a great time for beer lovers everywhere.

Mon, 07/30/2012 - 20:36 | 2663841 Absinthe Minded
Absinthe Minded's picture

I agree. It's not that Inbev boughti it, it's that the Busch boys sold out. Pieces of shit. It was the same feeling when the Japanese bought the Rockefeller tower in New York City. American icons sold for personal profit. Have they no shame?

Tue, 07/31/2012 - 04:05 | 2664300 Fred C Dobbs
Fred C Dobbs's picture

But now that Inbev owns Bud you can get a Stella Artois on draft just about anywhere. 

Mon, 07/30/2012 - 19:35 | 2663753 Jay Gould Esq.
Jay Gould Esq.'s picture

On a personal note of preference, highly recommended...

http://beerbygarth.files.wordpress.com/2011/08/3249402812_cf586b5dc5.jpg

Mon, 07/30/2012 - 16:35 | 2663380 Walt D.
Walt D.'s picture

Something else for Kindermädchen führend Bloomberg to regulate?

Mon, 07/30/2012 - 16:24 | 2663349 optimator
optimator's picture

I read so much about the evils of drinking that I gave it up!

I don't read anymore.

Mon, 07/30/2012 - 16:10 | 2663298 reader2010
reader2010's picture

I wanna have a beer with Becky Quick in a hot tub somewhere in the backyard of Warren Buffett's house.

Mon, 07/30/2012 - 16:00 | 2663267 Grimbert
Grimbert's picture

The small city I live in has more than 200 different brands of unpasteurised real ale for sale in around 300 pubs. That doesn't include lagers, pasteurised beers etc.

Germany might have 1250 breweries but their beers mostly taste the same. The UK and Belgium have the variety

Tue, 07/31/2012 - 02:15 | 2664235 dogbreath
dogbreath's picture

I agree.  I am on a sampling tour as I write and the pilsners are very similar.   that said,  Pilsner Bitchez

Mon, 07/30/2012 - 15:33 | 2663192 clawsthatscratch
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Brew my own...much prefer it to what I can buy...allgrain...last batch 15gal of Begian Witbier....bastard friends drank too much of it

Mon, 07/30/2012 - 15:30 | 2663174 THE DORK OF CORK
THE DORK OF CORK's picture

Irish pubs are empty now ................people are drinking at home - very sad.

It was part of a social enginnering programme the goverment implemented in the 90s and 00s ....banning smoking and such...

A pub is a Public House  -get it ? - you accept other people as they are in a public house  - not as they want to be or not want to be - if not stay in and watch some telly.

Its perhaps the true reason the Irish have become so easy to control as they are now atomised units of consumption rather then collective units of consumption.

PS.....lost a Beer(& Wine) competition to Bavarians once......the above figures are not that surprising to me.

Mon, 07/30/2012 - 23:48 | 2664128 mjk0259
mjk0259's picture

I found the beer prices astonishly high in Ireland, especially in pubs..

US you can buy a 30 pack of domestic for $20.

At least you could actually talk to people in Irish pubs at that time.

US everyone is screwing around with their phone.

Tue, 07/31/2012 - 09:58 | 2664860 THE DORK OF CORK
THE DORK OF CORK's picture

Yes  , its more then the tax thingy.

You see after EMU and the Euro credit hyperinflation thingy (everthing post 1987) beer became expensive relative to wages and credit stuff (houses & cars)  cheap until the post 2006/7 implosion.

So people remained at home in their new expensive coccoons to watch telly instead of having beers with the lads.

Essentially the Euro made Labour very expensive in Ireland because of its ability to drag in imports....so Irish pubs where labour is the biggest cost went the way of the Dodo.

As I said already on other forums -  Ireland does not exist anymore - its merely a geographical area now - its not really a political, economic or social construct anymore.

Tue, 07/31/2012 - 02:39 | 2664247 cbxer55
cbxer55's picture

+1 on the phone thingie. Thought I was the only one who noticed this.

Mon, 07/30/2012 - 15:21 | 2663139 Overfed
Overfed's picture

I love my craft beers, but nuthin' beats an ice cold domestic light beer after doing yardwork on a hot day.

If there is a big collapse, I'm going to be stuck drinking home made plum wine. :-(

Mon, 07/30/2012 - 21:19 | 2663916 A Nanny Moose
A Nanny Moose's picture

On hot days, Indian Wells Orange Blossom Amber is the best beer in the world. IMO

Mon, 07/30/2012 - 15:04 | 2663085 larz
larz's picture

very disappointed in america's rankings

Mon, 07/30/2012 - 15:02 | 2663075 lamont cranston
lamont cranston's picture

An old girlfriend of mine did her MBA internship in Aalborg, Denmark around 1980. She was asked her first day there, "Why is American Beer like sex in a canoe?"

Answer: "Because both are fucking close to water."

Mon, 07/30/2012 - 17:34 | 2663561 Vidar
Vidar's picture

I've always heard that one applied to Coors Light.

Mon, 07/30/2012 - 20:59 | 2663873 cbxer55
cbxer55's picture

It applies to most all American beer, unfortunately. Even the "dark" beers like Michelobs, are more colored water than beer.

Guinness Extra Stout anyone? Looks like used motor oil, cannot see through it in a glass. ;-)

Mon, 07/30/2012 - 15:15 | 2663117 Clueless Economist
Clueless Economist's picture

that an old canuck joke

Mon, 07/30/2012 - 14:48 | 2663032 Piranhanoia
Piranhanoia's picture

In my state beer is a barbarous relic. 

Mon, 07/30/2012 - 15:16 | 2663118 Clueless Economist
Clueless Economist's picture

What Indian state are you from?

 

Mon, 07/30/2012 - 23:03 | 2664075 Piranhanoia
Piranhanoia's picture

Go west, not east,  Or, yes, the state has a native american name.

Mon, 07/30/2012 - 20:26 | 2663829 Tippoo Sultan
Tippoo Sultan's picture

Karnataka. Seringapatam -- a prevalence of British ales, actually. Not particularly refreshing in this tropical clime.

Mon, 07/30/2012 - 14:35 | 2662994 Jason T
Jason T's picture

I was wrecking Tsingtao's in Shanghia.. like 30 cents a bottle .. back in 2008.  Good times. 

Mon, 07/30/2012 - 17:07 | 2663486 garcam123
garcam123's picture

I spent some time on the island of St. Helena in the Central Atlantic where Napoleon died and they imported more Castle beer than food!

 

No Shit!  They are some beer drinking people down there and their second love is Boone's Farm wine!

Mon, 07/30/2012 - 13:50 | 2662815 Alfred E. Newman
Alfred E. Newman's picture

Well I wonder how long before President Mitt Romney will bring back probition.  (He is a morman after all).

A sober America is a better worker bee America, it's all about freedom and a productive America.

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