U.S. beer market sees overall decline, with notable shifts in regional performance

The U.S. beer market is experiencing notable shifts in performance, with overall volumes declining by 3.6% from January to August 2024 compared to the same period in 2023. This downward trend is reflected across nearly all states, though the extent of the decline varies by region. Among major beer markets, Florida, Texas, and New York posted declines below the national average, while California, Ohio, and Georgia fared worse. Indiana stood out as the only state with growth, recording a modest 0.5% increase during this period.

Data from IWSR's US Navigator highlights these trends and provides insights into state-level dynamics and performance across beer price tiers. The platform, known for its comprehensive analysis of the U.S. beverage alcohol market, attributes the challenges facing the beer industry to a combination of factors without a singular driving cause. Marten Lodewijks, President of IWSR's U.S. Division, notes that states with better performance tended to see growth within higher price tiers, especially in the Super-premium segment.

The Super-premium beer category has emerged as a bright spot, growing by 4% year-over-year through August 2024. This growth is particularly evident in the top five beer markets—California, Texas, Florida, New York, and Illinois—where high single-digit increases have softened declines in other segments. States such as Nevada, Indiana, Texas, and Maryland even saw double-digit growth in Super-premium beer sales.

The relatively positive performance of Premium-and-above beers is linked to evolving consumer behaviors, including a preference for premiumization at a lower cost compared to spirits or wine. Imported beers, particularly from Mexico, are also bolstering the Super-premium segment, taking market share from domestic products.

However, gains in Premium+ segments come at the expense of lower price tiers, dragging down the overall market. The Value segment is experiencing significant declines, with major markets like California, Illinois, Florida, and Wisconsin seeing double-digit losses. California's larger overall losses are attributed to the absence of growth in Premium-and-above beers, unlike Florida and Texas, where increases in these categories helped offset losses in the Value and Standard segments.

The ongoing premiumization trend within beer and across the beverage alcohol market reflects consumers' continued interest in higher-quality products, even amid economic pressures. According to Lodewijks, premium beer offers an appealing balance of quality and affordability compared to pricier wine and spirits, which supports its sustained performance in a challenging market environment. As consumers navigate price sensitivity across sectors, the demand for premium beer is expected to remain strong.