Beer brands, as part of the total alcohol beverage industry, not only compete against each other for consumer attention and dollars, but they also must compete against wine and spirits in the larger market for adult liquid refreshment.

To people in the industry, it’s not a big surprise that wine and spirits have been winning share of volumes from beer over the years, and the data for 2016 point to a continuation of this trend. The wine industry recently reported a 2.2 percent increase in total wine volumes, while the liquor industry posted a 2.5 percent increase in volumes. Beer, on the other hand, posted a 0.3 percent increase in volume. Clearly beer lost share of volume in 2016 and has seen its share of total alcohol decline – from 58 percent in 2000 to below 50 percent in 2016.

Now, perspective is important at this point, because the beer category is still the largest segment within the alcohol beverage space. And beer consistently wins as consumers’ preferred choice of alcohol beverages. Despite years of competitive pressure from wine and spirits, beer still holds the number one spot at retail and with consumers.

Sizing up the total alcohol beverage market provides even more perspective for distributors who are working with retailers every day in their local markets. Remember, a growing population in a market is the number one way to grow volumes. Based on national averages, every legal drinking age consumer that moves into a market brings an average of 2.5 gallons of new demand, though this amount varies from state to state. Roughly 50 percent of that new consumer demand goes to the beer category. Not a bad way to grow business if your local economy is adding jobs and people! But when population is not growing, then the competition for share of stomach steps up significantly among the segments.

Gallons of Ethanol Consumed Per Capita Beer Wine and Liquor 2000 to 2016

It is also important to note that the total per capita demand for alcohol (ethanol) is very stable and predictable over time. From 2000 to 2016, legal drinking age consumers purchased about 2.5 total gallons of pure alcohol per capita per year. This number has remained relatively stable over time, with the business cycle impacting consumer demand in a noticeable but only marginal way. In reality, the economic expansion from 2001 to 2008 only added a couple of extra drinks each year, and from 2010 to 2016 the additional drinks are even less. The population does indeed moderate its consumption of alcohol in total.

Gallons of Alcohol Consumed Per Capita 2000 to 2016

In today’s challenging legislative and regulatory environment, it is important to communicate to people outside of the beer industry that no individual segment or brand actually creates any new demand for alcohol. The consumption of alcohol beverages is predictable and constant, and most legislative and policy changes are simply designed to rearrange market shares among the existing players. In other words, rearranging the deck chairs in your market may have a noticeable impact as new businesses emerge, but it does not provide a real economic impact since the size of the total pie remains the same.