'Marketplace' Report: Serving Economic Blues Cash-strapped drinkers are starting to switch to lower-priced beers. Since January, Miller Brewing Company has seen a shift from higher-priced, premium beers to less expensive brands such as Miller High Life and Milwaukee's Best. Hear Nancy Marshall-Genzer of Marketplace.
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'Marketplace' Report: Serving Economic Blues

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'Marketplace' Report: Serving Economic Blues

'Marketplace' Report: Serving Economic Blues

'Marketplace' Report: Serving Economic Blues

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Cash-strapped drinkers are starting to switch to lower-priced beers. Since January, Miller Brewing Company has seen a shift from higher-priced, premium beers to less expensive brands such as Miller High Life and Milwaukee's Best. Hear Nancy Marshall-Genzer of Marketplace.

MADELEINE BRAND, host:

From NPR News, it's Day to Day. Is nothing sacred in this economy? Now, beer drinkers are having to make sacrifices. They're trading in their fancy micro brews for, well, something more ordinary. Marketplace's Nancy Marshall-Genzer is here now. Nancy, so when did beer drinkers start going for the cheaper brews?

NANCY MARSHALL GENZER: Well, Madeleine, actually quite recently. By the way, and just for research purposes, I'm actually cracking open a can of beer here, so I can totally (unintelligible)...

BRAND: It's just so I can relate little better.

MARSHALL GENZER: Yeah, I wish I could share, but you know, that would be a cross-country beer run, because I'm in Washington, you're in L.A. But I will drink to your health.

BRAND: Thank you.

MARSHALL GENZER: Welcome. So, you were asking when the cheaper beer started getting more popular. Miller's CEO Tom Long says, they started noticing an increase in sales of economy beers in January. And it looks like that increase came at the expense of higher-priced beers. Long says sales of Miller genuine draft, for example, were down more that 10 percent.

BRAND: OK. I'll let you have another sip. I'll ask you this question.

MARSHALL GENZER: Oh, thank you. Thank you.

BRAND: So Miller, Long, they're blaming the economy. They're saying people just can't afford to buy fancy beer.

MARSHALL GENZER: That's exactly right. And Long says, this is a direct result of people having less disposable income, less money in their pockets every week. Now, a lot of people assume that we drink more during tough economic times. And listening to me, you'd think that is the case.

BRAND: Clearly.

(Soundbite of laughter)

MARSHALL GENZER: But I asked David Henkes about that today, before I started drinking. And he's a food and beverage industry analyst with Technomic.

Mr. DAVID HENKES (Food and Beverage Industry Analyst, Technomic): People drink differently in a down economy. I don't know - want to say that they drink more or drink less, you know, but clearly, there's some behavior modification going on that is coming as part of the economy.

MARSHALL GENZER: And I imagined, Madeleine, there's quite a bit of behavior modification going on, when people drink, but that's a different subject. And thus far, all we know for sure, is that people are actually drinking cheaper beer.

BRAND: Cheaper beer. What about cheaper wine? Do you have a bottle of Night Train stashed in your desk?

MARSHALL GENZER: Unfortunately, I didn't have time to go out and get some wine. I just got the beer. That will be later. But it does look like people are drinking cheaper wine. And I have that at least anecdotally. I got the picture on wine from Dennis Manuel. And he's a wine rep for Strange Wines there in Los Angeles.

Mr. DENNIS MANUEL (Wine Representative for Strange Wines, Los Angeles): The retailers are doing well now, they tell me, because I think people are buying wine, and drinking it at home, rather than going out to restaurants, and having dinners, and drinking wine.

MARSHALL GENZER: And yes, people are bringing cheaper wine home. Manuel says they are bringing it home. It's in a 10 to 20 dollar range. And those bottles are selling quite well.

BRAND: Hmm. So, but that comes at the expense of the restaurants?

MARSHALL GENZER: Yeah. And we have some numbers on that. In the first quarter of this year, 31 percent of consumers said they had a drink away from home. That's down from 42 percent last year.

BRAND: All right, Nancy. Cheers. You're off to a rollicking start. Thank you very much. Happy weekend.

MARSHALL GENZER: Bottoms up.

(Soundbite of laughter)

BRAND: Nancy Marshall Genzer of Public Radio's daily business show, Marketplace.

MARSHALL GENZER: Thank you.

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