Tuesday, June 26, 2012

[Beerie] Because We Can Can Can

Welcome to Beerie, your weekly beer.
Western Michigan's Brewery Vivant uses only cans. Photo by Chad Cramblet.

The Huffington Post recently ran an article on the market growth of canned beer. It was written by a Harvard graduate who is also one of HuffPo's economics reporters and whose other recent contributions have included "After Years Of Outsourcing, Small U.S. Manufacturers Bring Jobs Back To America" and "Big Bank CEO Pay Spiked An Average Of 12 Percent In 2011, Study Says," so it's not exactly surprising she missed the mark by about a dozen tall boys.

In it the author posits, "It's not just hipsters driving the rise in canned beer. The sluggish economy also has Americans pining for tin." This is a great lede. If it were the year 2008.

She then follows this with her primary statistic, "Fifty-three percent of the beer Americans drank last year came in a can -- up from roughly 48 percent between 2003 and 2006, according to statistics from the U.S. Beer Institute cited by Bloomberg News. That's the highest share of beers being consumed in a can since 1995."

Again, this is a great statistic and I can certainly see how it would be a launching point for an argument that positions the increase of canned beer sales as a direct corollary of the crippled economy ... if it were 2008.

Oh, and that "pining for tin" line in the intro? IT'S ALUMINUM. Pretty much the rest of her argument was invalidated after this point by her inability to accurately define the materials used. (If cans were made of tin, they'd be 10-15x more expensive.)

What this economist's assessment of the increase in canned beer sales since 2006 fails to include is a host of other variables that have also contributed to it.

First let's look at her biggest mistake (aside from the tin v. aluminum gaffe): "...since Americans now have less money to spend, they're buying cheaper and lower-quality products." Which is exactly why the craft beer industry (which is by its very nature a higher-quality and more expensive product) has been seeing double-digit increases in sales year after year for the last 5 or so years?    ???


The warrant of her claim is at best misinformed and at worst following an entirely fallacious line of logic. Cans have always been the preferred packaging of the penny-pinching, quantity-over-quality drinker; this hardly accounts for a 5-point increase in sales over 5 years when, at the exact same time, beer sales have slowed overall and the percentage of craft beer sales consistently rose in the double-digits. What we really need is an explanation that accounts for all the variables, a little first-order logic as it applies to beer.

This isn't about macro vs. micro, but the distinction here is important. As the craft beer industry has grown exponentially over the last few years and has almost fully inserted itself into the mainstream, the country's perception of beer has been shifting dramatically and with it has come a whole new understanding of beer as a craft as opposed to a prole's product. And with that has come a whole new understanding of cans as their use applies to craft beer: where before cans were all about economy, now they're all about efficiency.

If the rise in canned beer sales correlates anything, it's the rise in craft beer sales. Cans are seen by more and more craft brewers as the superior packaging method because, well yeah it's cheaper, but also they're easier to transport (lighter-weight, not fragile) and they don't allow any light in, which is what causes beer to skunk. (This guy's explanation is on-point. And this one's.) The myth of the metallic taste? Wholly psychosomatic. (And if that were really the case, draft beer would taste like metal too. What did you think kegs were made out of?)

So if "fancy" craft brewers start canning their beers, what happens? BOOM: stigma gone. (It's also worth noting that many popular imported labels have started canning their beer for American export, also a new development since the 2003-2006 data range.) It's kind of like when some wineries started using screw-top bottles for wines that weren't meant for aging and wine-o's were all boo, hiss until they realized the many advantages of screw-tops (in particular the complete elimination of the oxidation and chemical tainting that often occurs as the result of using natural and synthetic corks). Oh yeah, and it's also cheaper for the winemakers (corks themselves run around a buck or two a piece), so everybody wins. As it was in wine, so shall it be for beer.

So while the "sluggish economy" (of years past) could certainly be a contributing factor to the increase in canned beer sales, it hardly goes toward explaining it all away as a tidy little X = Y. What is likely to happen is that we will continue to see canned beer sales increase AS craft beer sales increase and AS the economy continues to improve, which will effectively make this HuffPo piece moot.