Issue link: http://digital.copcomm.com/i/6221
26 / the tasting panel / january–february 2010 I n San Francisco last December, John Beau- dette, President of MHW, Ltd. importers and distributors, spoke about the impact of the recession on the alcoholic beverage industry at a day-long seminar hosted by law firm Nixon Peabody LLP. In studying sales in this and recent past recessions, Beaudette found that the percent of alcohol drinkers in the general population and the volume of alcohol they consume does not vary greatly (disproving the popular "drowning your sorrows" theory); but where, what and how they drink has changed. Consumers are drinking more at home and less in bars and restaurants, as is typical of re- cession behavior. Sales data show they are also trading down a bit and exploring value brands of beer, wine and spirits, and are favoring more domestic brands relative to imports. Further- more, consumers are taking more notice of store shelves and new products, and making more purchasing decisions based on discounts. Both distributors and on- and off-premise venues are destocking inventory in the reces- sion, allowing current supplies to sell through before reordering, and thus placing the burden of inventory storage more on producers and importers. There was some debate among the seminar attendees as to whether this destocking is merely a correction for previous overstock- ing from past distributor incentives, and also as to whether keeping less inventory on hand is a permanent shift in the supply chain as has been seen in other industries. Time will tell. Distributors are increasingly devoting their at- tentions to top brands in their portfolios, necessi- tating that newer and smaller brand owners and importers dedicate additional resources to sales of their products rather than relying on distribu- tors to do so. Direct-to-consumer sales may become increasingly important for some winer- ies as distributors focus on larger brands, and small distributors for all alcohol categories may become more relevant as they fill the consumer demand for a diversity of products. Importers, too, are focusing on brands they can gain the most value from—those that they own over those with which they partner. Beaudette was uncertain how long the recov- ery from this recession would take, due to great- er job loss now than in previous recent reces- sions. Alcohol sales still continued to climb over the last two years for which figures are available, though the growth rate slowed in the current economy. While inventory, importation and sales practices continue to shift in the background, consumers may have changed what and where they're drinking, but not how much. Despite the recession, as Beaudette put it, "Overall there's a lot to be grateful for in our industry." In The Biz Dollar Daze AlcoholIc beverAges weATher The greAT recessIon by Camper English consumers may have changed what and where they're drinking, but not how much."