Sunday, October 11, 2015

Restaurant Spending On Alcohol Increased Due To Prices

By Cornelius Nunev


Restaurants and bars charge a markup on alcoholic beverages, but individuals have been spending more to them there than in shops. However, it has every little thing to do with higher prices, rather than consumption.

Markup schmark-up

When looking at changes in the 30-year period from 1982 to today, NPR found that Americans are beginning to spend more on alcohol in bars and dining places, according to the "What America Spends On" series.

In 1982, the Cold War still existed, spandex was in vogue and yuppies were driving BMWs. Americans were also mindful of the mark up on beer, wine and spirits in dining places and bars, as only 24 percent of alcohol spending was in those places and 76 percent was spent in shops.

Today, spandex is seldom seen and yuppies still drive BMWs. However, we are spending more in dining places and bars, as 40 percent of alcohol spending takes place in those locations, compared to 60 percent in shops. However, much of it is to do with a 79 percent increase in bar and diner prices; store prices dropped 39 percent. If anything, that suggests more volume is bought in stores.

More wine spending

The biggest change was what the nation indulges in. In 1982, 48.9 percent of spending was on beer, followed by spirits at 34.6 percent and wine at 16.2 percent. However, spirits have fallen to 12.6 percent of spending and wine has ballooned to 39.7 percent of spending on libations for 2012.

The wine industry in America is in the midst of a gilded age. In 2011, according to the San Francisco Chronicle, there were 329.7 million cases of wine shipped around the country, which marked a milestone as the United States, for the first time, eclipsed France as the chief wine-drinking country, as that country went through 320.6 million cases.

In 2010, the American wine industry was a $30 billion industry. In that year, 241.8 million cases were sent from a lot of different wineries. Millennials are willing to spend more on costly bottles and are drinking more. California by itself produced 61 percent of that wine, which means California is the state where much of the wine comes from.

Most drink beer

From 1982 to 2012, the amount of beer that people drank did not change at all. In fact, it was 47.7 percent of sales in 2012, according to NPR. People are drinking less overall though because beer production has dropped, according to BusinessInsider, from 203 million gallons produced in 1990 to 182 million in 2011.

Beer drinkers are slowly gravitating toward brews from Main Street instead of Wall Street, as craft breweries are proliferating. In 2011, an 11 percent growth of the number of craft breweries was recorded over 2010. There were 1,989 craft breweries in operation, with 250 new breweries opening and 37 closing. Craft brewers produced almost 11.5 million barrels, a 5.7 percent share of the industry, and made $8.7 billion in revenue.




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