Increasingly worried about the imminent legalization of marijuana, big beer companies may be fretting needlessly about their potential competitors. (As if the choice was restricted to one substance or the other.) According to John Divine, analyst for InvestorPlace, the real competition is already present: craft beer.
In the ten largest states that have already legalized medical marijuana, beer sales actually rose initially by 0.5 percent (legalization celebration perhaps?) before merging with the national trend. Bloomberg projects that legalization might actually free up some cash for beer, as the price of marijuana decreases from its former bootleg status.
Meanwhile, the true threat to Bud, Coors and Diageo (whose brands include Guinness and Red Stripe) has already arrived: the “paradigm shift in the consumer palate.” Where previous generations weren’t offered a wide array of choice, today’s consumer has become increasingly exposed to new brands and new, complex flavors. Craft brewing, whose production is inherently smaller, has usurped its mass-produced counterpart with the massive pool of options. Marijuana legalization is its own, special, issue. [InvestorPlace] [Image: Flickr/modashell]