More Thoughts on Beer In A Bad Economy

First, an additional thought on declining beer consumption. As I noted in a previous post , the giant global beer companies are confronting declining sales in so-called "developing" and "third world" nations/regions. The ripple effect, however, will likely play out in the so-called "first world" countries/regions, like the U.S.

Why? Because companies like SABMiller and A-B InBev function on behalf of shareholders, and shareholders want healthy share price. So if demand for product drops in Croatia or Brazil, company managers will try to compensate for that decline in some other market. To do that, they'll devote more money to advertising in, say, the U.S., or use price-cutting to woo consumers.

Bottom line? Declining beer sales in China, Brazil, or Poland will spark beer wars in the U.S, Canada, or western Europe. And when the Big Brewers go after each other, small brewers get caught in the crossfire. (A matter I discussed in detail in two blog series I ran this summer, one here, and one here.

The second thought about beer-in-a-bad-economy concerns homebrewing. In the 20th century, interest in homebrewing soared during hard times, and then declined during good times. So we can expect to see traffic increase at brewing supply shops, on and offline.

But before you get too carried away with the do-it-yourself stuff, the always entertaining Patrick Emerson of the Oregon Economics blog studied the numbers. You may be surprised at the result. Read his thoughts here.