Beer in interesting times.

With the Bering Olympics still dominating the late summer sports scene, I am reminded of the ancient Chinese proverb, "May you live in interesting times," especially regarding the U.S. beer business. Indeed, in this issue's cover story (page 22), which explores the current state of the U.S. beer market, author Julie Johnson provides an astute overview of the several disparate wends affecting the industry, including consolidation, pricing pressures, new flavors, the continuing dominance of light beers, the importance of crafts and superpremiums and the larger role distributors are playing in marketing their beers, among other issues.

In the story, Tom Long, the new president of the Beer Institute and president and chief commercial officer of MillerCoors, says that the joint venture between Miller and Coors (completed this July) and the impending sale of Anheuser-Busch to InBev are "the two biggest structural changes our industry has ever seen." He goes on to say that recently, "there has been more drama in the U.S. beer industry [than we've seen] since Prohibition."

Still, taken as a whole, beer category volume grew by 1.2% in 2007, with domestic beers up 0.9% and imported brands gaining 2.8%, according to the Beer Handbook 2008, recently published by Beverage Dynamics' parent company, The Beverage Information Group. And total dollar volume increased 5.9% to $98 billion. In fact, a recent Gallup Poll suggests that beer has regained its place as the most popular beverage alcohol choice among Americans. The overwhelming popularity of light beer is still the major dynamic driving the beer industry today, with that category comprising 51% of total U.S. beer consumption, up 2.3% from 2006. Eight of the 10 top-selling domestic beers are light, with Bud Light topping the list, followed by Miller Lite and Coors Light, to name a few.

In the import category, Mexican beer continued to grow sales and dominate--with five of the leading 10 beers--including top-seller Corona Extra, followed by Modelo Especial, Tecate, Corona Light and Dos Equis. Of course, other imports such as Heineken, Heineken Premium Light and Guinness also saw expanded sales.

Even with the headwinds of growing national unemployment and a slowing economy, craft and specialty beers have maintained double-digit sales growth, fueling the "trading up" phenomenon across the industry. It's clear that American beer drinkers are drawn to the wide array of beer styles and tastes offered by craft brewers

Meanwhile, we do not yet know what effects the MillerCoors joint venture and pending InBev/A-B consolidations will have on those who sell beer at retail. It may actually have positive results, or it may not. Or it may matter little in the end. Still, the trend toward consolidation is clearly not abating. And not only in the beer industry. In case you haven't heard, the largest and fourth largest wine and spirits distributors in the U.S. have just combined in a joint venture to create a wholesaler behemoth called Southern/Glazer's Distributors of America. It is, indeed, interesting times in the beverage alcohol industry.

Richard Brandes, Editor-in-Chief