Beer biz volume up 0.5% yr-to-date thru Jun 14 in Nielsen all outlet data, including 1.2% gain in last 4 weeks over Memorial Day. Yet AB and MillerCoors each remain down roughly 1% in volume in these channels (down more overall). AB and MC off 1.3% and 1.1% respectively. Pricing overall remains healthy, up avg 63 cents, 3% yr-to-date to $21.74 per case. But MC avg prices up 65 cents, over 2x as much as AB avg case price, up just 28 cents. MC $$ sales up 2.4% while AB's up just 0.1%. That meant AB lost 1.6 share of $$ YTD, while MC down just 0.3 share. The two combined lost 1.9 share of $$, 1.3 of volume.

Halfway thru the yr, AB not coming close to its stated goal of share neutrality. But it has seemingly shifted focus from high end to more mainstream segments where it does most of its biz. AB lost 2.3 share of volume in above-premium segments to 26.6, according to Nielsen data (including 3.3 share loss in c-stores) while MC gained 1.8 share to 9.6 of above-premium biz. Yet at same time, AB up 0.1 in premium lights to 57.5 and 1.4 in subpremiums to 57.6. MC down 0.1 in premium lights and down 1.4 of subpremiums.

Bud Light flat yr-to-date (-0.3%), and up 1% last 4 weeks, 2d 4-wk period in a row that it gained. Bud Light held volume share, tho down 0.3 of $$ last 4 wks. So AB's performance on mothership seemingly improving. But Miller Lite is best performing domestic megabrand in scan. By a whisker. Also flat YTD (-0.1%). Coors Light down 2%, Bud down 3.4%. Top 4 megabrands about 40 share of beer $$ and have collectively somewhat improved trends, but still down 1.3 share of $$, and represent 2/3 of big 2's overall share loss.

Most of top growth brands are new products from AB or MC. For last 4 weeks, Mang-O-Rita got 0.6 share of $$ and Raz-Ber-Rita got 0.5 share (other Rita flavors have declined precipitously in recent periods). Meanwhile, Fortune got 0.3 share of $$, Coors Light Summer Brew 0.2 and Redd's Strawberry 0.2. So those 5 brands grabbed almost 2 share of $$ for 4 weeks thru Jun 14, while AB and MC lost almost 2 share in toto. Biggest brand share gainers YTD are Modelo Especial, Mang-O-Rita and Angry Orchard, each up 0.4.

Trading up has slowed a bit recently. Above premium segments still gaining share. But more like 2 share of $$ (2.2 last 4 weeks) than 3 share (up 2.7 share YTD). Yet Constellation Beers and Boston Beer continue on a major tear. Constellation Beers volume up 12% and $$ up almost 16% YTD. It gained 0.8 share of $$ YTD and 0.9 share last 4 weeks. Its avg case price up over $1 for 4 weeks. And Boston Beer volume remains up 31.5% YTD in scan data and it gained half a share of $$. Total craft volume up 13%, $$ up 17% (Nielsen includes Blue Moon and Shock Top). Gained over 1 share of $$ to 9.3 in Nielsen.

Tho AB gaining share of subpremiums, subpremium biz continues to decline. Volume down 3.9% YTD. Subpremiums remain 27 share of volume off-premise, under 20 share of $$. Down to 17.7 last 4 weeks. That's just 2 points bigger than imports. Subpremiums lost 1 share or more of volume and $$ YTD. Interestingly, no more outsized price hikes for subpremiums. Avg subpremium pricing up just 18 cents, 1.2% YTD. AB is still taking big volume hit with Natty Light. Down 6.8%. But 2d biggest subpremium Busch Light up 0.2% as avg prices basically level with last yr. Busch prices also level, but volume down 3.6%. Meanwhile, MC's biggest subpremium brands, Keystone Light and Miller High Life, are both way off. Down 8.5% and 6.4% respectively. Icehouse and Mil Best Ice trends are similar. Only growing subpremium brands in top 10 are Pabst, up 4.6% and Bud Ice. Bud Ice still up at double digit pace YTD, with avg prices down about 1%.  

Data from BI's economist Lester Jones and BA's economist Bart Watson add perspective to AB/MC's draft woes we reported last issue and their new on-premise initiatives. On premise accounted for 18 share of volume last yr, Lester estimates, with lion's share in bars/taverns and restaurants, at 7.7 and 7 share respectively. Concessionaires, recreation, military and others split remaining 3+ share. But those on-premise channels account for fully 53.3 share of total beer retail dollars, Lester figures, a fat $56.2 billion. Again, most of that in taverns/bars (18%) and restaurants (22%). Brewers don't get big piece of those retail $$, but on-premise remains critical showcase for new brands, established brands and where trends begin.

Then too, at Beer INSIGHTS Spring Conference, Lester pointed out that US draft beer biz stuck at same 20-mil-bbl level as sold in early 50s, despite explosion of brewpubs, taprooms, etc. Meanwhile, BA economist Bart Watson pointed out that increasing chunk of craft draft being sold in channels that aren't being tracked by IRI, Nielsen, even GuestMetrics. Indeed, he calculated 600K bbls brewpub/micro growth in 2013 alone, bbls "that you can't see in the scan data." That biz also suggests some of the "doom and gloom" surrounding on-premise "may not be as warranted." Bart expects "same if not more missing bbls" this yr. Net-net: ain't just reporting states where AB/MC draft has been hammered (see last issue). Bart's number suggests share losses even steeper and shows why AB and MC so concerned about beefing up on-premise efforts. Meanwhile, off-premise remains more fragmented. Biggest channel is still c-stores: 31 share of volume, 17 share of $$. Supermkts and liquor stores each about the same: 20-21 share of volume, 12-13 share of dollars each. Mass merch up to 4.4 share of volume, but still just 2.2 share of $$.  

Not just top suppliers built profits significantly since 2008. Distributors avg gross profit/case expanded from $3.98 to $4.66 during these 5 yrs, according to analysis by OMAC Bev Advisors, based on volume data from INSIGHTS and financial info from NBWA's annual Distrib Productivity Report. During same period, cash operating expenses rose from $2.98 in 2008 to $3.39 per case. So OMAC calculated that total distrib EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) grew from $3 bil in 2008 to $3.6 bil in 2013. And that's up from $2.6 bil in 2002. Distribs' EBITDAR/case increased to $1.27 in 2013, up from $1 in 2008 (92 cents in 2002). So while operating expenses increased about 40 cents/case each period (2002-2008 and 2008 to 2013), EBITDAR increase over last 5 years was more than triple than increase in previous 5 (27 cents vs 8 cents).

As beer biz "moved from steady balanced growth" in earlier period "to aggressive price mix at the expense of volume," OMAC figures that 27-cent increase in EBITDAR/case over last 5 yrs splits out this way: 16 cents from mix (7 cents/case generated from crafts, 9 cents from non-crafts), 14 cents from pricing/inflation which they attribute to "primarily non-craft." Distribs lost 3 cents/case from volume dip. In brief, "scale trumps churn," sez OMAC, and 74% of the EBITDAR increase derived from non-craft.

OMAC highlights strategic differences between 2002-2008 and 2008-2013. First period characterized by 3 main suppliers with "market share focus" instituting price hikes below inflation, while costs also rose below inflation and price/mix/volume showed steady, modest growth. After ABI and MC deals and biz consolidated to 2 main suppliers, there was "less focus on market share," "concerted efforts" to narrow price gaps, "significant mix shifts," plus craft growth. So avg prices rose above inflation, driving volume down. But, despite volume loss and costs also outpacing inflation, profit growth rate doubled.

That was then. This is now. OMAC sees focus shifting back to mkt share. Indeed, AB has made holding share an explicit goal. OMAC also asks "are we prepared for much less mix shift?" That happened at AB in Q1, tho perhaps not intentionally. Two other questions: 1) "Can the actions taken in 2008-2013 be replicated or can new levers be pulled?" 2) "Can smaller distributors keep pace if costs continue to rise above CPI?"  

While last issue we featured problematic volume declines of top 2 in key mkts, it's also important to detail how their profits went through the roof in exact same period. Back in 2008, AB, MillerCoors (pro forma), Constellation Brands Beer Division (then Crown) and Boston Beer collectively made $4 bil in operating income. That was led by AB's $2.9 bil in its last yr as independent co. Flash forward to 2013 and those same 4 suppliers made $7.365 bil in oper income. That was up $3.37 bil, with AB at $5.2 bil. For the 4 players, that amounted to almost a doubling in 5 yrs, led by AB's jump of $2.26 bil.

AB made almost $4 per case in 2013 ($3.90). That was basically double the $2 per case it made in 2008 ($1.99). Think about that. That's approximately double per case what the most profitable beer wholesalers make. Per case! And while wholesaler profits grew in period (see below), distrib profit growth cannot even compare. AB lost about 10% of its volume, and still nearly doubled profit per case. And AB still has huge scale advantage; its $5.2 bil in oper income from US is about 4x MillerCoors. On a per case basis, it's about 2.5 to 1. MillerCoors also more than doubled its oper income to $1.3 bil and virtually doubled oper income per case from 84 cents to $1.63. Not too shabby either.

Constellation Brands Beer Division had huge $300 mil, 73% profit surge in fiscal 2014 (thru Feb 2014) as it became the owner of its own production. That led to the most striking change in these numbers. Last yr, Constellation Beers became the most profitable brewer on a per case basis. Per case profits jumped from $2.60 to $4.22. In 2012, it was neck-and-neck with Boston for the least profits per case among major suppliers. In 2013, it passed AB to become #1. Wow! Actually, Boston profit per case declined again (as had Crown in some prior yrs), despite its spectacular growth. Boston oper income per case dropped 13 cents to $2.40 per case. (Editor's note: all these numbers are calculated based on public reports, tho AB's US oper income courtesy of Bernstein Research.)  

All day long at INSIGHTS Spring conference this yr, speakers kept coming back to beer's topic du jour: franchise laws and the need (or lack thereof) for potential reforms or modifications of 3-tier system. Many different perspectives (detailed in our other publications), but most striking comments came from consultant Mike Mazzoni. Mike's several decade career spans early 70s AB, starting Barton Beers and presiding over Corona's first great run in 80s, doing a large number of distribution deals in 90s and 00s etc. At this stage, Mike a truly independent voice (tho still involved in multiple projects). So his comments regarding 3-tier system and franchise laws especially notable.

Mike pointed to the many "wildly successful" craft cos under current system and noted that "something must be right if one looks around at the wealth created at both the supplier and distributor tier. Unquestionably, that success didn't come without risk, investment and hard work over many years." Tho many now consider system "unfair… maybe the underlying issue is that some brands are simply better than others and that's why some brands sell better than others?" While many big brewer brands now face downside of product lifecycle, "many brands never grow to have a life cycle… and today with the thousands of new entries, the Law of Numbers suggests there will be a helluva lot more failure than successes." Even AB, with its vast resources and ability to get 80-90% distribution in less than 1 mo, "fails more often than not" with new products. And "back in the early Barton days we picked up more Modelo Especial than sold." So how can small brewer "offering little or no support…expect overnight success?"

Does the three tier system limit access? "Give me a break!" said Mike. "How does one explain craft growth of 100 mil ce's since 2008?" With thousands of new brands "I submit that the current system must be working for the vast majority of suppliers cuz all of that beer wasn't delivered and serviced by UPS. There is no route to market issue." But now too many brands are "vying for finite" truck, retail space and support from distribs.

"When did access to a distributor's organization and retail relationships become a right rather than an opportunity?" Mike asked pointedly. "Every time a distributor opens his organization to another brand or supplier, he is placing equity at risk for the new player…. I've never seen a distributor take on a brand with the intention of trashing it… that defies business logic." Mike ain't big fan of carve out laws either: "Basic premise of carve out laws provides special treatment for a select group…. That doesn't work for me… it's simply not fair to potentially penalize the suppliers whose brands are paying for the basic distributor infrastructure." A "supplier should have the right to move," according to Mike, based on a "valuation matrix that takes into account how long the distrib has had the brand, trends, gross profit multiples, etc." Another reason Mike is not a fan: state legislators don't understand "complexities" of biz and screw it up.

Another stinging question from Mike aimed at distribs: "Why is a terminated brand worth 10x GP to the guy losing the brand and only 3x GP to the guy gaining the brand?" Mike cited actual recent example of "multi-state distributor losing Franziskaner and Spaten (who cares) asking an arbitrator for 8x GP in one state and offering 2x GP for those same brands in another state where they got those brands. Go figure?" On other hand, "in my experience, the majority of distributors work with suppliers and their competitor regarding brand transfer…it's a minority of jugheads who have magnified the problem."

Then too, if a brand is "performing poorly, odds are that it will perform poorly when transferred" too. Only "rarely" does moving to another distrib "result in improved sales," according to Mike. In the end, brand transfer issues "all about money" and the answer should be "negotiated, business solution" hammered out by various parties sitting across table from one another, not legislation or lawsuits. "So-called franchise reform would place the equity built up by distributors over generations at risk," concluded Mike, citing "excellent analysis" by OMAC Bev Advisers "suggesting that the elimination of franchise rights would result in the loss of 20-30% of a distributor's equity." Mike also finds "particularly interesting" that "AB and MC have been silent on this issue," pointing to "interesting, unintended consequence" that could be AB expanding branches, "leaving only one conventional distributor option for smaller suppliers in those states… Careful what you ask for."

Finally, "everyone knows what's needed, but the industry can't get the discussion where it belongs." Here's what's needed, according to Mike: "stand-still agreements, defined realistic performance standards, defined valuation criteria." Those would be "good starters" and "the only way" to "fix things" and "it needs to be done yesterday."  

Interesting to compare and contrast industry's two biggest winners right now: Constellation Brands Beer Division (CBB) and Boston Beer. Similarities and differences emerged during chat with their longtime leaders, prexy Bill Hackett and chairman Jim Koch, at our Spring Conference. Importantly, each views big oppy from volume being lost by big brewers/mainstream brands. Jim calls it a "leaky bucket"; Boston aims to catch "thimbles" of volume (and $$) from megabrand leakage. (Okay, sometimes "espresso cups," Jim said.) Similarly, CBB sees tons of oppy for "growth, share and volume" from erosion of mega brands, specifically premium light beers. Both said mega brand losses likely to continue.

Quick reminder of just how much each is winning; recent volume gains remarkably similar. CBB up 730,000 bbls, 5.9% last yr, 1.4 mil bbls, 12% since 2008; up double digits last 6 mos. Boston's volume, including cider, up 665,000 bbls, 25% in 2013, same 1.4 mil bbls, 71% since 2008. And it was up 33% thru mid-Apr. So the two combined gained 1.4 mil bbls last yr (half of 5 yr gain) and are poised to grow even more this yr, 1.5-2 mil bbls.

Yet CBB's and Boston's specific models couldn't be more different. Constellation's is "pretty simple." It brings just 7 import brands to market. Then too, in any single mkt, CBB "maxes out at about 50 skus." "Not about complexity," but "discipline, focus on designing specific skus and brands against points of opportunity," said Bill. Boston's biz model "unfortunately quite different," said Jim. Boston has some "power skus" in its all-domestic portfolio: Lager, Seasonals, Variety Packs, Twisted Tea and Angry Orchard's lead brand. But all in, Boston has tons more brands and about 450 skus. That's 5X CBB's 90 skus, for about ¼ of volume. Boston's economics "don't support" an ability to compete vs big guys, but rather it's gotta "differentiate with higher quality products in whatever niche we're in." And Boston's in lots more niches: craft beer (with internal stylistic complexity), cider, tea and lemonade. CBB is beer only, indeed, Mexican beer only. But Mexican beer had 62 share of import $$ in IRI multi-outlet + convenience data thru 5/25.

Tho their portfolios very different, each has had runaway "overnight success" that in reality took decades to accomplish: Modelo Especial at CBB, Angry Orchard at Boston. Each a testament to long-term perspective/support and lots of hard work/patience. These are the 2 brand franchises gaining the most $$ share in 2014 scan data, each up 0.4 share. Modelo Especial up 29% in IRI MULC yr-to-date. Tho 29% of CBB volume, it's 46% of growth. Similarly, Angry Orchard Crisp Apple is easily Boston's biggest brand, up 143% YTD. All Angry Orchard well over half of Boston's growth in IRI, tho just 28% of volume.

Tho other Constellation execs have downplayed M&A, Bill revived that talk somewhat. While acknowledging that existing distribution footprints create challenges for acquisitions of craft brewers, Bill also said that co's vision to be a "20 dollar share" player in US beer biz not likely to be "completely" done "organically." Bill's "not sure" what the M&A component will look like, and CBB has "plenty on its plate right now," but Constellation "interested in expanding our business" and "always interested in looking at other opportunities that work within our model." Meanwhile, Boston has "looked at a lot of deals" but "could not make them work because of our commitment to our existing [distrib] network. We don't want to be competing with our network." In fact, any deal that puts Boston in a "competing house is something damaging to our business model." So M&A "on shoulders of Alan Newman," one of the "truly creative individuals" in craft biz, said Jim, (and combo "Hell's Angel and hippie love child") who's running smaller Alchemy & Science projects.

One thing Jim and Bill have in common (besides growth, momentum): each is spending a ton of money, and much more than they expected, on cap ex to fulfill increased demand. Constellation's plans for Piedras Negras brewery now call for more than $1 bil investment and now "more people in Nava on expansion than running the brewery," Bill said. But ownership "committed to the business" and "for the right reasons," to ensure continued health. Meanwhile, Boston boosted cap ex from $2 mil/week last yr to $3 mil/week this yr. Jim also has more people working on expansion than in brewery now in Pennsy, with "massive construction" there and in Cinci. But with Freshest Beer Program, Boston doesn't want beer sitting in distribs' warehouses "getting old, degrading the quality." Rather, "cheapest place" to keep beer is in tanks at breweries. And Boston putting $35 mil into new tanks to "substitute for distributor inventory." That leads to final shared issue: out of stocks. Boston talked last yr about shortfalls and Bill said at conference that CBB has "markets running short on select packages, tho "no market should be out of any brand." Despite momentum, CBB couldn't predict inventory requirements, supply challenges or sales trends. So it has "select issues," with out of stocks, like 24-oz Modelo cans, Modelo glass, 18-pks in Fla and others that CBB "working to replenish as quickly as possible."  

The bedrock theoretical assumption behind public health advocacy of environmental strategies to reduce alcohol problems - Sully Ledermann's "Single Distribution Theory - has been disproved for decades in the real world. That theory assumes that average drinking rates determine heavy drinking rates. Therefore, policy should be aimed to reduce per capita consumption via higher prices and restrictions on marketing/ availability instead of targeted interventions. Statistician/scientist John Duffy and journalist/researcher Christopher Snowdon penned a paper for the Institute of Economic Affairs aimed at "lay readers who are likely to have been misinformed by campaign groups that remain wedded to the theory despite extensive empirical evidence to the contrary." They show that the "mathematical model is simply wrong" and shred Single Distribution Theory (or Total Consumption Model). What's more, they argue that this "attractive simplicity" has in fact hurt most "those who experience alcohol problems" since public health has neglected them in favor of "ineffective broad brush population interventions over specialist alcohol treatment" that could and would actually help them. The paper points out that Duffy has long been criticized by public health for previously voicing this long-held position, and some financial ties to the industry. Yet their arguments are convincing. For the sake of simplicity and brevity we have bulleted some of their major arguments. The narrative in the report is more powerful than these highlights suggest:

• "Per capita alcohol consumption largely depends on the amount of heavy drinking in a population, not vice versa…. Numerous examples, including the UK in recent years, show that alcohol related harm does not necessarily correlate with overall alcohol consumption."
• In Britain, nearly 70% of the alcohol is consumed by about 20% of the drinkers. Similar estimates have been made, and some more extreme, for the US. In and of itself, this "indicates the extent to which per capita consumption depends on the drinking patterns of a minority." Again, not the reverse.
• Extensive analysis in Britain shows that "poor people drink less but experience higher rates of 'alcohol related harm.'" Men and women employed in "routine jobs are 3.5X and 5.7X more likely to die from an alcohol-related disease than those working in higher professional jobs, despite being in socio-economic groups that drink the least alcohol," indeed about ¼ to 1/3 less than professionals.
• Between 1980 and 2000, alcohol consumption rates rose slightly in the UK, but liver cirrhosis mortality rates "nearly doubled." In Sweden, liver cirrhosis rates dropped by 50% while drinking rates fell just 15%. In Norway and Ireland per capita consumption rose while liver cirrhosis rates fell. Another longer term stat: public health advocates routinely note that alcohol has become 45% more affordable in the UK since 1980, yet per capita consumption "is at almost exactly the same level today as it was in 1980."
• More recently, from 2002-2012 alcohol related hospital admission rates jumped 135% in the UK while per capita consumption declined by 18%.
• While England, Scotland and Wales share similar pricing and licensing laws, and "identical" advertising restrictions, during the same period, Scotland experienced a 35%-37% decline in alcohol related deaths while England saw little change and such deaths rose in Wales.

In addition to these real-world refutations of Single Distribution, Duffy and Snowdon provide several statistical anomalies in Ledermann's original work, including the "impossible to understand" assumption that the proportion of heavier-than-average consumers would be a "universal constant" across cultures. Single distribution's assumption that drinking is "homogenous" in different populations is also contradicted by "countless studies which show particular subgroups drinking at quite different levels" and changing those levels "in different directions at the same time." There's more, but they're convincing on the notion that "there isn't and never was a 'single distribution of alcohol consumption.'" They also place the control model into cultural context with references to key European supporters of it decades ago.

Not surprisingly, Duffy and Snowdon are proponents of targeted interventions rather than generalized interventions, including: rehab services, educational campaigns, enforcement, primary care interventions and harm reduction. Read the full report here. Ref 3  

While survey after survey shows that fewer teens are drinking and drinking heavily, public health advocates at the Boston University School of Public Health, the Center on Alcohol Marketing and Youth and elsewhere continue to ramp up efforts to identify the "types of alcohol and the specific brands with which youth" are drinking less often and less heavily.

The reasons behind these efforts voiced in the most recent published research show both the researchers' intent to target specific restrictions against specific beverages/brands and the very sketchiness of the project. The researchers' language is overwhelmingly speculative. Identifying beverages and brands consumed by youth: 1) "could inform the development of" prevention strategies to reduce drinking/harm, the authors point out, i.e. "taxes could be raised" on specific products; 2) "might inform efforts" to "enforce or inform" marketing restrictions or practices that "may promote underage drinking." (Our italics.) What the authors do not consider: even if specific "problem" beverages or brands could be identified and effectively restricted, that teen drinkers would simply switch allegiance to different ones. The major new "findings" from the same internet survey of slightly over 1000 13-20 yr-olds that CAMY (an organization with a history of methodological challenges), used to identify favorite brands among underage drinkers earlier this year (see April 7 AII Update) are equally unpersuasive.

It turns out that some of the most popular brands among youth are the same brands with which they drink heavily, which is thoroughly unremarkable. Some of those brands are linked to a greater likelihood of bingeing with them than their "market share" among the same drinkers would predict. But others -- including most of the popular beer brands -- are less likely to be "binged" than their market share would predict. Net-net: young people, like not-so-young people, drink popular alcohol beverage brands and the authors can't really tie disproportionately higher binge drinking to many brands or beverages. Still, more study is necessary, they inevitably conclude. Some of the ostensible findings:

• Binge drinking - 4 per session for women, 5 for men - accounted for 67% of all drinks consumed by these underage youth. Drinkers averaged 2.2 binges per month; binge drinkers 4.4 binges. (Editor's Note: This, if true, is the most damaging statistic in the study.)
• Slightly over half of the underage drinkers reported binge drinking with at least one named brand, 38% with at least one beer brand, 36% with a spirits brand, 25% with an FAB and 11% with wine.
• Spirits accounted for 44% of all "binge reports," and "had the highest ratio of binge reports to youth market share with a ratio of 1.22. In other words, spirits' share of binge reports was disproportionately higher (by about 20%) than its share of overall alcohol consumption by these youth. By contrast, beer accounted for 31.4% of all "binge reports" but its binge-to-market share ratio was the lowest among all beverages at .74, compared to 1.16 for FABs and (perhaps surprisingly) wine at 1.09.
• Eleven of the top 25 brands by binge drinking prevalence were spirits, 8 beers, 5 FABs, 1 wine. The top 25 brands accounted for 46.2% of "all binge reports," only slightly above the 42% that they accounted for of total consumption. Net-net: CAMY's attempt to target significant binge-likely brands basically failed.
• Youths' most popular beer brands mirror adult preferences: Bud Light, Bud, Coors Light, Corona, Heineken, Keystone Light and Miller Lite, each among the top dozen brands across the population. And the binge reports: market share ratio for each of the domestic beer brands was below 1, which meant they had a smaller share of binge reports than overall. While CAMY has especially targeted FABs, even the most popular among these young drinkers Smirnoff Ice had a binge-to- market share ratio right at 1.
• Similarly, popular liquor brands among adults are also popular among underage drinkers: Jack Daniels, Smirnoff vodka, Captain Morgan rum, Bacardi rum. Most of the popular liquor brands, however, had a binge-to-market share ratios higher than 1. Oddly, the brands with the highest binge-to-market share ratio, of 2 or higher, were the super-premium tequila Patron, Hennessy cognac and E&J Gallo brandy. Very few budget brands of any alcohol beverage were among the most popular brands.

Despite these thinnest of findings, the authors recommend that the US "should consider preferentially raising taxes on spirits and/or products with high alcohol content, since spirits account for most binge drinking among youth," neglecting to note that spirits taxes are already significantly higher, and that's apparently not deterring consumption. They also recommend "stronger policies and surveillance efforts pertaining to alcohol marketing practices," despite the fact that their analysis included nothing about marketing.

Not surprisingly, DISCUS dismissed the study out of hand. "David Jernigan and his agenda-driven surveys continue to make a mockery of true and honest scientific inquiry. According to government research, the vast majority of underage drinkers -- 91.3% -- do not purchase their own alcohol, but rather obtain it from parents and other legal-age adults. This fundamental fact makes this survey meaningless and a complete waste of $2,242,826 in taxpayer money. Teens who drink alcohol consume whatever products they can get their hands on, either by taking it from their own home or getting it from an adult. It's simple-minded to suggest that teens are seeking out expensive super premium spirits. If anything, this survey reflects the brand choices of adults of legal purchase age. Even Jernigan acknowledged that 'the findings for any particular brand should be interpreted with caution' due to the 'limited sample size of youth who consumed any particular brand.'" Ref 2  

Just as the annual Monitoring the Future (MTF) surveys of high school students have reported significant declines in teen drinking over the last two decades or more, the federal government's Youth Risk Behavioral Surveillance surveys (YRBS) report the same progress, especially for heavier levels of drinking. And once again this progress has been achieved primarily through increased awareness and education efforts and despite alcohol being more available, relatively cheaper, more heavily marketed and with an expansion of (especially sweeter) flavors, all of which public health advocates would predict lead to more drinking.

Like the MTF, YRBS indicates high double digit decline in the rate of current use (at least once/month) and even larger declines in the rate of heavy (or so called "binge drinking," 5+ for males, 4+ for females at least once in the month prior to the survey) across large samples of 9th, 10th, 11th and 12 graders. Again echoing MTF, YRBS reports that drinking rates declined the most among the youngest students. The table below shows that while rates of heavy drinking changed little from 1993 to 2003, those rates fell sharply over the last decade. Look at the youngest students. The rate of current drinking fell by 1/3 over the last decade, from 36.2% to under 25%. Similarly, the rate of heavy drinking also fell by about one-third, to below 14%. That followed much more modest declines in both practices among 9th graders in the previous decade. Decline rates were similar among 10th graders. Though less progress occurred among 11th and 12th graders, rates of current drinking fell by 16-22% respectively over the last 10 years among students in those grades. The table also shows how varied youth drinking rates are across the US. Looking at 4 large metro areas, current drinking rates ranged from 18.6% in San Francisco (across all grades) to over 37% in Chicago, more than double. Similarly, heavy drinking rates were as low as 10.4%-10.8% in New York City and San Francisco to 17.6% in Chicago. In Palm Beach County, FL and San Bernardino, CA the heavy drinking rate exceeded 19%. And while less than 2% of NYC students admitted to extreme drinking (10+ in a single session) the rate was more than double (4%) in Houston. Heavy drinking remains a more rural than urban phenomenon. Rates of extreme drinking were as high as 6.5% or more in Montana, Oklahoma, West Virginia and Wyoming. Incidentally, current pot smoking rates (23.4% overall), varied from 16% or so in San Francisco and NYC to 28.5% in Chicago and as high as 32.2% in Milwaukee and DC. Perhaps even more troubling than drinking among teens, and the rates remain admittedly too high, the YRBS survey showed that 43.3% of teens said they'd texted while driving, and nearly 2/3 of teens who drove a car texted while driving in 2013. In a handful of (again mostly rural) states, the texting rate exceeded 50% of all students: Montana, Oklahoma, Wyoming and South Dakota. Ref 1