Brewery Business Hopping Despite Tanking Economy Beer sales in the U.S. are going strong despite the lagging economy. Both small breweries and large breweries alike are struggling to keep up with demand as consumers are drinking at home more.
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Brewery Business Hopping Despite Tanking Economy

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Brewery Business Hopping Despite Tanking Economy

Brewery Business Hopping Despite Tanking Economy

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And finally this hour, a little ball park-style refreshment: a story about beer. If you average it out, Americans drink more than 30 gallons of beer a person each year, and brewers are one of the few industries not having their worst year since the Great Depression. NPR's John Burnett visited two breweries, one of the world's largest, which is under construction, and a much smaller one.

Unidentified Woman (Bartender): What kind of beer would you like? Light, medium, dark, hoppy, sweet?

JOHN BURNETT: I'm sitting here in the Draught House, a venerable neighborhood pub in Austin, Texas, which just celebrated its 40th year. Next to me is Josh Wilson, the brewer and manager. So times are tough all over, Josh. How's business here?

Mr. JOSH WILSON (Brewer): Business is good. Sales are up 10 percent in January, and I think perhaps people are giving up other things before beer.

BURNETT: What he says is echoed by industry watchers like Harry Schumacher, editor of a trade newsletter, The Beer Business Daily.

Mr. HARRY SCHUMACHER (Editor, Beer Business Daily): Beer is not recession-proof, but it's very recession-resistant. And being in the beer business is definitely a better place to be than in the airline or car-dealership business. It's an affordable luxury. Even during hard times, you can still afford to have a beer.

BURNETT: Though beer company stock prices were hurt by high cost of commodities in '07, they've been recovering, in part because beer is considered a good hedge during hard times. Which is not to say the recession hasn't changed some beer drinking habits. With less to spend, people are drinking at home more and trading down, as the industry says, to less-expensive brands. But local craft beers are going strong.

(Soundbite of bubbling liquid)

BURNETT: This is 512 Brewery in South Austin, and that's the sound of a fermentation tank. This tiny operation, only seven months old, sells only 100 barrels a month, all locally. It has one delivery van and two employees. One of them is brewer and owner Kevin Brand.

Mr. KEVIN BRAND (Brewer): We really haven't skipped a beat. My plans were to grow fairly organically, and in the last few months I've just exceeded all my expectations, and I'm selling beer faster than I can brew it.

BURNETT: Another change in beer consumption is that people are buying fewer imports, presumably because they're pricier. But this fact has not affected construction of one of the largest breweries in the world.

(Soundbite of construction)

BURNETT: Grupo Modelo is building a gargantuan new brewery south of Piedras Negras, Mexico, just across the border from Eagle Pass, Texas. When finished in the spring of next year, it will produce enough Corona to supply the entire U.S. market. Corona beer is the number one U.S. import.

Sprawled across the scrub desert, the cerveceria looks like a moon colony under construction with its towering malt silos, mammoth, stainless-steel tanks and 15-story warehouse. Juan Manuel Prado is health and safety manager at the new brewery.

Mr. JUAN MANUEL PRADO (Health and Safety Manager, Grupo Modelo Brewery): (Through translator) The American public is the biggest beer market in the world. Drinking beer is part of your culture. Other products might be affected by the economy, but everything revolves around beer. When you're sad, you have a beer; when you're content, you have a beer.

BURNETT: With the new Corona brewery gearing up to produce 7,200 bottles of beer a minute when all four production lines are running, they certainly hope the American thirst for beer stays recession-proof. John Burnett, NPR News, Austin.

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