Big Alcohol Unhappy as Beer Sales Drop and Marijuana Sales Rise

It seems that the legal recreational marijuana industry is taking the buzz out of the craft beer scene. A new report from Cowen and Company shows that in Colorado, Oregon and Washington the beer industry is underperforming. For the last two years, these beer markets have underperformed.

Beer volumes have fallen over 2% year-to-date, according to Brewbound. The report shows that “the magnitude of the underperformance has increased notably.”

Vivien Azer of Cowen and Company said, “While (marijuana) retail sales opened up in these markets at different points of time, with all three of these states now having fully implemented a retail infrastructure, the underperformance of beer in these markets has worsened over the course of 2016. This is perhaps not surprising, given that U.S. government data for the states of CO, WA and OR all show consistent growth in the cannabis incidence among 18 – 25 year olds, coupled with the declines in alcohol incidence (in terms of past month use).”

Mainstream beer producers reflect a 2.4% decrease in sales volumes. Premium domestic sales volumes declined 4.4%. Premium domestic beer manufactures include Bud Light, Miller, Coors Light and other common household names.

Cowen projects that continued volume pressure to these premium domestic beer companies will continue. MillerCoors is the only company to have outperformed by Cowen’s standards due to having an “ample cost savings as an offset.”

In the Denver craft beer market alone, the market has declined 6.4%. There are still small glimmers of hope in Oregon and Washington as some growth was still being noticed.