Customers turn to beer in hard times

While demand for higher-priced liquor has slackened and customers are trading down to cheaper alternatives, the beer industry isn’t exactly benefiting from the trend.
In fiscal year 2009, which ran from July 2008 to June, beer sales statewide were down nearly 1.4 percent from the previous fiscal year.
Beer sales also have sagged in Northeast Mississippi, according to Adam Mitchell, the vice president of Mitchell Distributing. Mitchell bought Cash Distributing last year and said his business has a 72 percent share of the area’s beer market.
He feels customers are trending back down to beer, but said overall sales are getting hit hard by unemployment.
In Northeast Mississippi, the unemployment rate has hovered at or above 11 percent this year.
“If people are working, they have disposable income,” Mitchell said. “When they aren’t working, that cuts back on their beer consumption … We can pinpoint a lot of our sales decrease to where a factory has shut down … Our business is going to be a reflection of the jobs and the economy of the region.”
Mitchell said his company’s beer sales are down more in Lee County than they are in Mitchell’s Delta market, which includes Bolivar, Sharkey, Issaquena, Washington and Sunflower counties.
“The Delta didn’t feel the boom that Tupelo did,” he said. “With the expansion comes a little bit of retraction.”
He added that Tupelo’s beer sales are significantly impacted by the employment rates in the surrounding counties. For example, if a man from Hatley gets laid off at his job in Tupelo, he won’t drive into the city as frequently. He also won’t stop at a convenience store after work to buy gas, chips and beer before returning to dry Monroe County.
Mitchell said his company has found that customers are reducing their beer consumption, buying a six-pack instead of a 12-pack on a weekend and buying beer twice a week instead of three times a week.
Similar to their new buying habits with wine and liquor, customers also are buying cheaper beer brands, he said.
Mitchell, along with the package store owners and managers, are hoping for a turn around sooner than later. The key, they say, is getting workers employed so they can have more discretionary money.
Andy Nash, owner of Rebel Liquor and Wine in Tupelo, said, “The party’s damn near over … Unless people get out and start spending their money, they’re going to nail the casket shut.”

Carlie Kollath/NEMS Daily Journal