Decline of Sales of Regular Beer Essay Example | Topics and Well Written Essays - 1500 words

Decline of Sales of Regular Beer - Essay Example The topic tries to analyze why the sale of beer has dropped and tries to design alternative strategies to power growth once again. Discussion of the product in relation to its current TARGET market demographics USING US CENSUS DATA Beer is one of the products that saw a sales decline in developed country but showed growth and development in the emerging economies. An overview of the beer growth trend shows North America and Western Europe trailing behind the emerging countries and Africa leading in terms of sales volume. Fig. 1 at left demonstrates the strength of beer sales by region. ` Fig. 1 Forecast five-year compound annual growth rate (CAGR) by region 2012-16 Source: Canadean cited in SABMiller's According to an independent industry analyst cited in SABMiller's report, China is considered as the biggest market for beer followed by other emerging markets. However, same report shows that although China is a big market, profit is so slim because of its very low beer pricing. In co ntrast, beer sales in South America remain profitable and show both growth and profitability. As indicated, there is a greater opportunity in beer sales in Brazil, Peru, and Argentina. According to a study done by the USDA Foreign Agricultural Service on July 23, 2010, China has imported 17,433 liters of beer from the United States. U.S comes only as the number eight beer supplier to China. Meanwhile, according to same USDA report Germany is the beer exporter to China. (see Fig 2). According to this report the annual per capita consumption of beer in China is estimated at 36.8 kg, per year and supply does not match consumption. This equation is a clear opportunity for beer manufacturers or SABMiller's to intensify their exports to China. Fig. 2 China’s beer imports 2007-2009 Why is the product declining? Volume of beer sales declined in USA because of change of taste preferences, unemployment of drinking men, and change of consumer tastes. Stockdale, Charles and Sauter, Micha el in an article published in Wall St. (April 19, 2012) said that beer is one of the products that the Facebook generation is not buying. As it is, this is an argument for the change of drinking preferences of the young generation that has to be considered by beer manufacturers. Accordingly, the young generation prefers light beer than regular beers which was the choice of beer drinkers before. Very few among the young drinkers have tasted regular beers, and those young drinkers today is considered as the heavy market for light beers, source stated. In UK, decline, according to Akwagiram, Alexis, a writer of BBC News who gathered opinion of experts, was due to many causes, health consciousness of people is but one of them. Beer to them has an image problem because of the notion that it adds to weight problem. Another thing is the change of preference to wine particularly ordered as part of food entrees in restaurants.