{"id":33951,"date":"2016-12-08T22:00:00","date_gmt":"2016-12-08T22:00:00","guid":{"rendered":"https:\/\/merryjane.com\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/"},"modified":"2016-12-08T22:00:00","modified_gmt":"2016-12-08T22:00:00","slug":"investment-firm-says-legal-weed-is-shrinking-beer-sales","status":"publish","type":"post","link":"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/","title":{"rendered":"Investment Firm Says Legal Weed Is Shrinking Beer Sales"},"content":{"rendered":"

Consumers in states which have legalized recreational marijuana are reportedly less likely to enjoy the unique sensation of getting<\/span> crossfaded<\/a>. Last week Vivien Azer of Cowen and Company<\/a>, an investment analyst specializing in beverage and cannabis markets, presented the firm’s research on the commercial effects of legal marijuana for the beer business at a biannual conference hosted by Brewbound<\/a>, a media outlet covering the craft beer industry. The group’s findings don’t bode well for brewers: Azer says that beer sales have “collectively underperformed”<\/a> in Colorado, Oregon, and Washington—states renowned for their craft beer sectors—over the past two years, lagging behind national sales of suds in the U.S. beer market.<\/p>\n

Using data collected by the Nielsen Company (a marketing research firm),<\/span> Azer and her co-authors concluded<\/a> that total beer sale volume has declined by 2 percentage points across the three states which rolled out recreational cannabis earliest. Breaking down the data further, the Cowen reports find that its mainstream, Big Beer companies which are bearing the brunt of the downturn in those states, with their “economy beer volumes” (think Busch and Miller High Life) declining by 2.4 percent, with supposedly “premium” domestic volumes (such as Bud and Coors Light) contracting even more by 4.4 percent. While craft beer has fared better over the same sales period, its rate of growth has “decelerated” in Oregon and Washington and actually declined in Colorado, but the report admits this development is consistent with nationwide trends for craft beer, which may finally be reaching a plateau<\/a> after years of rising market share for small and independent brewers. Perhaps the most interesting finding was from the beverage market in Denver, Co., the state’s hub for its legal marijuana and tourism industry, where total beer volumes declined 6.4 percent. Only imported beers appear to have weathered the arrival of legal cannabis in the above states without any measurable damages, though Azer says the sector there still lags behind the national growth rate for foreign brewskis.<\/p>\n

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Azer acknowledged<\/span> in her presentation<\/a> that the Nielsen data set is fairly limited, given the relatively recent debut of legal adult-use cannabis in only a few states; however she believes the declining sales trends, particularly in 2016, align with longer-term national cannabis-use dynamics reflected in the U.S. government’s own National Survey on Drug Use and Health<\/a> (NSDUH). As Azer explained in her talk, the NSDUH has found that self-reported daily use of cannabis has increased year over year, particularly among males and low-income households. “The pressure we are seeing on lower-priced beers in consistent with the trends we are seeing in cannabis use by income group nationally,” states the report, adding that<\/a> “over the last 10 years (through 2014, the most recently available) we have seen the biggest increases among lower-income households, where cannabis use is also highest.” Furthermore the government’s survey charts how popular perception of risks associated with cannabis consumption has declined while imbibing alcohol is increasingly viewed as less healthy; making it appear that kush is being more frequently substituted for beer. Cowen and Company believe these national tendencies make it likely that the effects seen in Colorado, Oregon, and Washington will be replicated elsewhere as additional states legalize recreational cannabis.<\/p>\n

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So what was Azer’s advice for the beer industry on how to stay competitive in a world with legal cannabis? One strategy she recommended was to “double down” on marketing towards women—as she noted earlier in her presentation, while men are reporting diminishing interest in booze relative to their affinity for kush, according to the NSDUH, alcohol consumption continues to grow among American females. “You have to embrace female consumers, and how you can talk to her,” Azer said to the room of industry representatives,<\/span> as reported by Brewbound<\/a>. “It can’t be the bikini-clad girl from the 1980s. That doesn’t work.” She was more skeptical in her appraisal of the earning potential for cannabis-infused alcoholic beverages, alluding to Melissa Etheridge’s THC-instilled wine, adding “I don’t really know how big that overall market could be. It seems like a very punchy social lubricant when you mix these two things together.”<\/p>\n

Yet, counterintuitively,<\/span> Azer suggested<\/a> that there might be an upside for the beer industry as markets for  legal cannabis products continue to expand, by invoking a fundamental economic principle—greater supply means falling prices for cannabis, and that could loosen disposable income for pot users to spend on beer again. “If you’re going to make the argument that your core consumer has a finite number of discretionary dollars, price deflation—as [cannabis] markets formalize, more products come onto the market, and drive some price competition—could be a helpful offset in terms of freeing up some incremental dollars that can flow back into the beer category.” If Azer’s predictions bear out, it means that the best hope for the American beer sector to compete with bud might be to simply keep calm, carry on, and concede that legal cannabis is here to stay.<\/p>\n","protected":false},"excerpt":{"rendered":"

Data indicates brew sales decreased most in states with legalized recreational cannabis.<\/p>\n","protected":false},"author":2,"featured_media":33952,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3036],"tags":[],"acf":[],"yoast_head":"\nInvestment Firm Says Legal Weed Is Shrinking Beer Sales - Merry Jane<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Investment Firm Says Legal Weed Is Shrinking Beer Sales - Merry Jane\" \/>\n<meta property=\"og:description\" content=\"Data indicates brew sales decreased most in states with legalized recreational cannabis.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/\" \/>\n<meta property=\"og:site_name\" content=\"Merry Jane\" \/>\n<meta property=\"article:published_time\" content=\"2016-12-08T22:00:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/merryjane.com\/wp-content\/uploads\/2024\/03\/Beer_WIDE.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1118\" \/>\n\t<meta property=\"og:image:height\" content=\"610\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"MJ Staff\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"MJ Staff\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/\"},\"author\":{\"name\":\"MJ Staff\",\"@id\":\"https:\/\/merryjane.com\/#\/schema\/person\/b90d5b22bd5e702cf8cbd8e406675f7b\"},\"headline\":\"Investment Firm Says Legal Weed Is Shrinking Beer Sales\",\"datePublished\":\"2016-12-08T22:00:00+00:00\",\"dateModified\":\"2016-12-08T22:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/\"},\"wordCount\":913,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/merryjane.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/merryjane.com\/wp-content\/uploads\/2024\/03\/Beer_WIDE.jpg\",\"articleSection\":[\"NEWS\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/\",\"url\":\"https:\/\/merryjane.com\/news\/investment-firm-says-legal-weed-is-shrinking-beer-sales\/\",\"name\":\"Investment Firm Says Legal Weed Is Shrinking Beer Sales - 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