[WSJ] American drinkers are abandoning beer for harder stuff, squeezing the world’s biggest brewers.Anheuser-Busch InBev SA, Molson Coors Brewing Co. and Heineken NV all reported sharply lower U.S. beer volume in the first quarter compared with a year earlier as drinkers turn to other alcoholic beverages, such as wine or whiskey.
AB InBev BUD -0.32%â–² said its volumes fell 4.1% in North America, partly because of weakness in the company’s core Bud and Bud Light brands. Last month, Heineken said its volumes fell by a high-single-digit percentage in a declining U.S. beer market, without being specific. And last week, Molson Coors said its U.S. sales fell 5.8%, driven by a 3.8% drop in domestic brand volumes. That sent its share price tumbling 15% in a single day, to a four-year low.
Executives blamed a much colder start to the year compared with 2017, when warmer weather drove brisk sales. Despite the volume drop, AB InBev said it raised prices and boosted revenue per hectoliter. Strong volumes in markets such as Mexico, Colombia and Argentina helped, too. Shares rose early Wednesday in Belgium, before ending the day flat.
Still, the industrywide volume declines were sharper than expected, punctuating years of slowing growth amid broader headwinds.
Alcohol consumption overall is stalling. That has intensified a fight between brewers, distillers and winemakers for a more limited pool of drinkers. In that booze battle, beer has been losing out, especially among younger drinkers.
"Growth in wine and spirits has continued," Gavin Hattersley, chief executive of MillerCoors, the U.S. unit of Molson Coors, told analysts after reporting its own falling sales last week. Millennial drinkers are "shifting from beer to wine and spirits," he said.
At the same time, consumers more broadly have been turning away from bigger brands‐in categories such as frozen food and deodorant‐toward smaller ones they see as healthier, more natural or made locally. Craft breweries have capitalized on that trend in recent years, and many bigger breweries have snapped them up or marketed their own small brews. But even craft-beer sales have started to slow recently, and the sector’s smaller volumes haven’t been able to make up for declines in the mass-market brands.