This month marks the twenty-first year that I’ve been writing about and observing the beverage alcohol industry, and I thought it might be fun to look back at those first few issues of Beverage Dynamics from the middle of 1990. In those months, the rising specter of an impending FET (federal excise tax) increase cast a giant shadow over everyone in the industry. Business boomed at the end of 1990 because people wanted to build up inventory before the tax hike, which, indeed, came in 1991. For those of you who remember, the result was very close to what industry members had predicted: sales fell as did tax revenues. In fact, it reportedly took several years for tax revenues to equal what they’d been before the FET increase.
Interestingly, some stories we published in 1990 sound very similar to ones we could be writing today. For example, a story about South American wine, called ‘Wine from the Other America,’ had this quote from Robert Parker: ‘The Chilean wines are capturing market share’¦.You simply can’t find too many wines from around the world that have that level of quality in that price range.’ And then we had a feature on the tremendous growth of light beer, which at that time had increased consumption to 28% of the U.S. beer market. The leading brand was Miller Lite, which was selling twice as many cases as Bud Light and Coors Light combined. Today, of course, light beer is still growing, but it now comprises more than 52% of U.S. beer consumption, with Bud Light dominating the segment and 7 out of the top 10 leading brands being light beer.
Industry consolidation has remained a theme through the decades. Just look at this list of the world’s top 10 leading spirits companies we published in 1990: IDV/Grand Metropolitan; Seagram; United Distillers/Guinness; Hiram Walker/Allied Vintners; Suntory; Bacardi; Pernod Ricard; Brown-Forman; Pedro Domecq; and Jim Beam. Several are gone and the others are changed, while consolidation remains a major industry dynamic.
In those days wine coolers were all the rage, and dry beer was the newest craze from brewers. In fact, one of my first articles in September of 1990 discussed that emerging segment that had seemingly exploded from nowhere. ‘Dry beer has gotten off to a big start,’ the story began, ‘but the question is whether the product represents a mere fad or the beginning of viable new category in beer.’ As we all know, it soon became clear that ‘fad’ was the answer. In that same issue, my feature story on Bourbon and American Whiskey discussed the category’s ‘potential resurgence.’ It also noted Jim Beam’s decision to expand distribution, in limited quantities, of the recently launched 126-plus barrel proof (then-called) Booker Noe’s Bourbon, for $30 a bottle.
In those 1990s issues we explored strategies for merchandising whiskies, the mass marketing of Fighting Varietals (and the launch of Sutter Home’s first Chardonnay), the developing popularity of tequila, and a feature article on branded line extensions.
It seems to me that in just over two decades some means of conducting business in the beverage alcohol industry (ie, computerization, the internet, etc.) have changed dramatically. Still, many of the basic themes are recognizable. It’s like looking at a picture of yourself from 21 years ago and then looking in the mirror; you’re the same person, but where did those lines come from?
Richard Brandes, Editor-in-Chief