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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 - 01:47 | 2664221 Hobie
Hobie's picture

Have another beer Alfred and forget about that probition stuff. Whatever probition is, isn't doesn't sound like freedom.

Mon, 07/30/2012 - 22:18 | 2664009 andrewp111
andrewp111's picture

He won't do that. Romney is smart enough to know that it is best that the unemployed and disgruntled be drunk all the time. It is better for social peace.  In fact, it is even better if they are drunk and stoned.  Mittens will legalize Pot.

Mon, 07/30/2012 - 15:48 | 2663242 nevadan
nevadan's picture

If you want to talk about some fucked up drinking laws--Utah's got 'em.

Mon, 07/30/2012 - 15:08 | 2663098 HungrySeagull
HungrySeagull's picture

Prior to '94, we would get a 6 pack to ease the pain of the big road. What with spring suspension and all.

Mon, 07/30/2012 - 13:49 | 2662813 Snakeeyes
Snakeeyes's picture

I had a blog on beer consumption and GDP growth a while ago. Scary!

Mon, 07/30/2012 - 13:20 | 2662694 mkhs
mkhs's picture

   When I was a kid in Germany, I engaged in what in the US would be considered underage drinking. ... 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.

 

How much underage drinking did you do?

Mon, 07/30/2012 - 15:02 | 2663076 Bob
Bob's picture

My thought exactly.  A helluva lot, for his departure to have that kind of impact.

But then I've slowed down too. 

Mon, 07/30/2012 - 13:20 | 2662688 q99x2
q99x2's picture

US is down proportionately to AA's increase in participation.

Its a sober revolution coming at you.

Mon, 07/30/2012 - 23:08 | 2664084 krispkritter
krispkritter's picture

What's the difference between an alcoholic and a drunk?

Alcoholics go to meetings, drunks go to bars...

Mon, 07/30/2012 - 22:22 | 2664015 andrewp111
andrewp111's picture

Wrong. We are down in proportion to the number of new wineries springing up everywhere. Total alcohol consumption never decreases. It just gets redistributed between different classes of booze.

Also, stronger beer is now available on tap almost everywhere. Americans now appreciate good strong beer. It takes less gallons to get equally drunk, and is a lot more pleasurable to drink.

Mon, 07/30/2012 - 21:11 | 2663899 A Nanny Moose
A Nanny Moose's picture

Rehab is for quitters

Mon, 07/30/2012 - 13:20 | 2662687 American Sucker
American Sucker's picture

Beer is good.  But there are times, after a few, that I marvel that I can drink grains for fun when billions can barely eat.  What a world.

Tue, 07/31/2012 - 08:33 | 2664579 Umh
Umh's picture

People are like bacteria in that we will multiply until their are to many of us for some requirement to support.

Mon, 07/30/2012 - 13:17 | 2662676 azzhatter
azzhatter's picture

I drink a fifth of vodka a day since my dr told me to cut back.

Mon, 07/30/2012 - 13:13 | 2662643 dwdollar
dwdollar's picture

I brewed my own recently with a 5 gal brew kit. My family grows wheat, so I hope to get good enough to avoid the kits completely. I wonder how many other beer drinkers have discovered home brew as a much cheaper alternative? One of the benefits of being unemployed/underemployed.

Mon, 07/30/2012 - 21:02 | 2663867 cbxer55
cbxer55's picture

When I was a kid, my father used to home brew beer in the basement. On more than one occasion, the result was a bunch of exploding bottles in the dark hours of the morning. Wake up the whole house every time it happened.

What was he doing wrong?

Mon, 07/30/2012 - 22:23 | 2664018 andrewp111
andrewp111's picture

Too much sugar in the bottles to fizz them up. He should have used kegs anyway.

Mon, 07/30/2012 - 13:57 | 2662846 duo
duo's picture

I've been doing it on and off for 15 years.  With good water filtration, the homebrew is getting pretty good.  $20-25 worth of materials gets you 2 and a half cases of beer that is not made from GM corn and rice, like some, ahem, larger breweries use.

Mon, 07/30/2012 - 13:03 | 2662623 cbxer55
cbxer55's picture

I drink Heineken Dark myself. I enjoy the taste, but mostly it's for the battle with kidney stones. One dark beer a day reduces by 40% the odds you'll get them. Two a day it's more like 65%. Three a day, you'll not get any.

http://wiki.answers.com/Q/Should_someone_with_kidney_stones_drink_beer

American made, colored water beer? Not for this cat!

Mon, 07/30/2012 - 20:18 | 2663821 Anusocracy
Anusocracy's picture

Beer, and brewers yeast, has a nucleoside, uridine, in it. Uridine is in a nutrient mix with DHA and choline for treating memory loss in alzheimer's. I already take choline and DHA and I'm going back to beer and adding brewers yeast.

http://en.wikipedia.org/wiki/Uridine

http://www.eurekalert.org/pub_releases/2012-07/miot-nmi071012.php

CAMBRIDGE, MA -- A clinical trial of an Alzheimer's disease treatment developed at MIT has found that the nutrient cocktail can improve memory in patients with early Alzheimer's. The results confirm and expand the findings of an earlier trial of the nutritional supplement, which is designed to promote new connections between brain cells.

Alzheimer's patients gradually lose those connections, known as synapses, leading to memory loss and other cognitive impairments. The supplement mixture, known as Souvenaid, appears to stimulate growth of new synapses, says Richard Wurtman, a professor emeritus of brain and cognitive sciences at MIT who invented the nutrient mixture.

"You want to improve the numbers of synapses, not by slowing their degradation — though of course you'd love to do that too — but rather by increasing the formation of the synapses," Wurtman says.

To do that, Wurtman came up with a mixture of three naturally occurring dietary compounds: choline, uridine and the omega-3 fatty acid DHA. Choline can be found in meats, nuts and eggs, and omega-3 fatty acids are found in a variety of sources, including fish, eggs, flaxseed and meat from grass-fed animals. Uridine is produced by the liver and kidney, and is present in some foods as a component of RNA.

These nutrients are precursors to the lipid molecules that, along with specific proteins, make up brain-cell membranes, which form synapses. To be effective, all three precursors must be administered together.

Results of the clinical trial, conducted in Europe, appear in the July 10 online edition of the Journal of Alzheimer's Disease.

Plans for commercial release of the supplement are not finalized, according to Nutricia, the company testing and marketing Souvenaid, but it will likely be available in Europe first. Nutricia is the specialized health care division of the food company Danone, known as Dannon in the United States.

In the new study, the researchers used electroencephalography (EEG) to measure how patients' brain-activity patterns changed throughout the study. They found that as the trial went on, the brains of patients receiving the supplements started to shift from patterns typical of dementia to more normal patterns. Because EEG patterns reflect synaptic activity, this suggests that synaptic function increased following treatment, the researchers say.

Patients entering this study were in the early stages of Alzheimer's disease, averaging around 25 on a scale of dementia that ranges from 1 to 30, with 30 being normal. A previous trial found that the supplement cocktail does not work in patients with Alzheimer's at a more advanced stage. This makes sense, Wurtman says, because patients with more advanced dementia have probably already lost many neurons, so they can't form new synapses.

A two-year trial involving patients who don't have Alzheimer's, but who are starting to show mild cognitive impairment, is now underway. If the drink seems to help, it could be used in people who test positive for very early signs of Alzheimer's, before symptoms appear, Wurtman says. Such tests, which include PET scanning of the hippocampus, are now rarely done because there are no good Alzheimer's treatments available.

If I could afford it I would buy this:

http://www.lef.org/Vitamins-Supplements/Item00921/Cognitex-with-NeuroPro...

Mon, 07/30/2012 - 13:54 | 2662839 El Viejo
El Viejo's picture

I heard that dark beers contain more nitrosamines which are a known carcinogen.

Mon, 07/30/2012 - 16:31 | 2663370 blunderdog
blunderdog's picture

If you're drinking enough beer for the nitrosamines to be an issue, your liver will give out way before the cancer gets you.

Mon, 07/30/2012 - 13:16 | 2662673 azzhatter
azzhatter's picture

I never heard that. I'm off to buy a twelver

Mon, 07/30/2012 - 12:59 | 2662616 Dapper Dan
Dapper Dan's picture

I think i will knock off early and have a Heady Topper!

 

  Heady Topper
American Double / Imperial IPA / 8.00% ABV
The Alchemist

 

 

http://beeradvocate.com/

Mon, 07/30/2012 - 12:51 | 2662581 Winston of Oceania
Winston of Oceania's picture

I like Beck's and really don't buy anything else except for guests. Until now that is, now they are making it here in America. I still had some imported and did a comparison side by side. The domestic American Beck's was lighter in color, much lighter in flavor (had to check if it was a light beer), and poorly carbonated. If I can't get the import I will find something else, I couldn't believe the difference. All that aside it could be a reason for a decline in German production, moving production closer to market.

Mon, 07/30/2012 - 13:12 | 2662651 JeffB
JeffB's picture

I got a little beer brewing kit (it can be used to make wine as well) and learned a little from the books.

Supposedly, per German law, beer can only be made from barley malt, yeast and hops. In the U.S. they typically add sugar, which is cheaper. It also makes it thinner & less able to hold a good head.

 

Mon, 07/30/2012 - 23:05 | 2664081 krispkritter
krispkritter's picture

Off with their (bad)head!

No sugar here. I'm in the German Kamp...

Mon, 07/30/2012 - 21:07 | 2663891 A Nanny Moose
A Nanny Moose's picture

IIRC, the bigs in the US also add corn.

Mon, 07/30/2012 - 14:24 | 2662951 Alfred E. Newman
Alfred E. Newman's picture

 

SUGAR!!! REALLY? FROM CORN AND RICE NO LESS

 

 

 

Mon, 07/30/2012 - 13:47 | 2662798 blunderdog
blunderdog's picture

"Beechwood aging" is the biggest scam in the world.  It means throwing a bunch of 2x4s in the vats so there's more surface area for the yeast.  You can brew something they call beer in about a week rather than the month it would take in a vat with no planks.

It doesn't look or taste much like beer, but it has alcohol in it, so most Americans will tolerate it.  Given that a 24oz can of it can be purchased for $1.50 (sometimes as low as $0.99), it has a certain appeal.

Mon, 07/30/2012 - 12:49 | 2662574 bank guy in Brussels
bank guy in Brussels's picture

Article speaks of teen-age drinking, common in Europe ... here in Belgium it is age 16 legal for beer and wine ... it is just not the same as in Anglo countries ...

Here in Continental Europe children grow up tasting beer and wine at home ... the general rule in cafés for a long time has been, if you can see over the edge of the bar, you can have a drink

On the Continent we drink a lot but perhaps because it is so 'social' and 'family' and not 'forbidden fruit' to children, we have much less public drunkeness and drink problems, than for example in the UK ... America's age 21 restrictions are totally weird to us Europeans

Belgium as HQ of the biggest beer company in the world ... that certainly fits the Belgian national profile

 

Mon, 07/30/2012 - 14:09 | 2662903 Dulcinea
Dulcinea's picture

Rochefort 10 - my favorite.  But you can't get it in the US.

Mon, 07/30/2012 - 21:47 | 2663954 Alfred E. Newman
Alfred E. Newman's picture

No, but you could find details about it and have a nano brewery make a Clone of that beer in the US.

It's what the yeast is made of, that is the issue.

Mon, 07/30/2012 - 20:30 | 2663833 Der Wille Zur Macht
Der Wille Zur Macht's picture

Yes you can. Even BevMo has it stocked.

Mon, 07/30/2012 - 12:57 | 2662610 johnQpublic
johnQpublic's picture

the under 21's are only allowed to have that afghani heroin and mexican weed and bolivian coke.

got to get 'em hooked young

its easier for a youngster to get something that is illegal than something that is legal

Mon, 07/30/2012 - 12:43 | 2662553 LawsofPhysics
LawsofPhysics's picture

Who didn't see this coming?  Beer is the curse of the working class after all.

Mon, 07/30/2012 - 14:59 | 2663066 BudFox2012
BudFox2012's picture

"Work is the curse of the drinking class"
- WC Fields

Mon, 07/30/2012 - 14:44 | 2663023 exi1ed0ne
exi1ed0ne's picture

"Beer is proof God loves us and wants us to be happy"

-Ben Franklin

I feel sorry for people who don't drink. When they wake up in the morning, that's as good as they're going to feel all day.

--Frank Sinatra

An intelligent man is sometimes forced to be drunk to spend time with fools.

--Ernest Hemingway

Mon, 07/30/2012 - 14:02 | 2662872 nevadan
nevadan's picture

Work is the curse of the drinking class.  ;)

Mon, 07/30/2012 - 21:04 | 2663881 A Nanny Moose
A Nanny Moose's picture

Indeed. Are a drinker with a work habit too?

Mon, 07/30/2012 - 12:41 | 2662547 nevadan
nevadan's picture

imo English beer is the best.  Nothing beats a Taddy Porter and a grilled steak.

Tue, 07/31/2012 - 04:15 | 2664307 Fred C Dobbs
Fred C Dobbs's picture

If you see it on tap, try a Fuller's London Pride. 

Mon, 07/30/2012 - 16:40 | 2663400 homersimpson
homersimpson's picture

I prefer a Duff Beer myself. Steak is optional if you can substitute it with a donut.

Mon, 07/30/2012 - 15:55 | 2663252 nevadan
nevadan's picture

hmmm....  Someone doesn't like English beer... or maybe dark beer... or possibly grilled steaks.  What-e-v-e-r.  That leaves more for me. 

Mon, 07/30/2012 - 12:38 | 2662541 bank guy in Brussels
bank guy in Brussels's picture

A 'hectolitre' is 100 litres.

Even for serious drinkers, that's a lot of beer.

Though a nice thing is about some other forms of alcohol, like whisky and some red wines like bordeaux, is that they take the years well. - A genuine 'long-term asset'.

Mon, 07/30/2012 - 14:51 | 2663043 smiler03
smiler03's picture

2 litres per week is a lot?!?!?!? Even in my time at AG in Brussels we'd have 2 litres per lunchtime, 5 days per week.

You should get out more ;O)

Mon, 07/30/2012 - 15:44 | 2662539 Wakanda
Wakanda's picture

"In the US, the industry has been more than morose..."

I'll crack a Bud Light Lime to fight the heat and do my part to animate the animal spirits.

It kinda tastes like lime soda.

Edit:  I'm not complaining.  It is very, very hot here, and I like lime soda!

Mon, 07/30/2012 - 12:36 | 2662535 stinkhammer
stinkhammer's picture

mmmmmm  beer

Tue, 07/31/2012 - 00:26 | 2664161 Nage42
Nage42's picture

> 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

 

It'll _never_ happen... the "hard day at work" part that is.  Ha!

Mon, 07/30/2012 - 20:31 | 2663836 philipat
philipat's picture

It's interesting that Indian consumption is so low. I think it speaks more to the poor quality of the local brew, regulatory hurdles and low per capita income levels. My life long experimentation has confirmed that it is difficult to beat a cold one (Or two, or..) with a nice spicey vindaloo.

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