Power Hour: You Say You Want a Craft (R)evolution

Dan Wandel, the senior vice president of IRI’s beverage alcohol team, believes that craft beer’s impressive growth over the last decade no longer needs to be referred to as a “revolution.”

“I think we are at a point now where I am ready to drop the ‘R,’” he said during today’s Brewers Association (BA) Power Hour conference call. “The American Revolution lasted 8 years. We need to start referring to this as the craft evolution.”

Craft’s growing share of the overall beer segment continues to be well-documented by industry and conventional media outlets alike, and Wandel feels there is “an abundance” of evidence to suggest that craft beer is evolving into the mainstream.

“The segment is going the right direction and continues to increase its percent change per year ago,” he said.

Dollar sales for BA-defined craft – which excludes companies like Craft Brew Alliance (CBA) and North American Breweries (NAB) – were up 16.5 percent in total U.S. multi-outlets (MULO) through the year-to-date period ending July 14. When the convenience channel is included, that figure increases to 18 percent.

For Wandel, craft’s sustained and significant year-over-year sales growth, wider distribution of craft products and increased wholesaler interest and retailer merchandising support illustrate just how much consumer demand for craft exists. Moreover, the continued growth of craft comes as sales of domestic light beer are rapidly declining. Since Jan. 3, 2010, dollar sales of light beer have lost 3.9 share points across total U.S. multi-outlets and convenience channels.

Meanwhile, offerings from craft breweries including Samuel Adams maker The Boston Beer Company, Sierra Nevada and CBA are steadily taking over shelf space at U.S. supermarkets, a channel that has traditionally been dominated by domestic beer offerings. Dollar sales for Boston Beer, the fifth largest beer vendor in the supermarket category, are up an impressive 32.6 percent. Dollar sales for Sierra Nevada, the eleventh largest supplier in the channel are up 8.2 percent. CBA, in the twelfth spot, are up 11.6 percent in dollar sales.

Those vendors are helping to propel the entire craft segment to its eighth consecutive year of double-digit percent dollar sales growth in the supermarket channel. Through July 14, dollar sales of IRI-defined craft beer (which includes CBA and NAB) are up 15.3 percent in U.S. supermarkets.

But while dollar sales are up for all three companies, their overall share of the supermarket segment is down. In fact, seven of the top 10 craft vendors have lost a combined 3.65 share of craft sales through July 7. Only Lagunitas Brewing, Bell’s Brewery and Stone Brewing, which rounded out the top 10 list of supermarket suppliers, saw improved share gains of 1.02, 0.13 and 0.19 respectively.

So who were some of IRI’s winners and losers at the mid-year point? Below is a snapshot of the top-10 craft vendors, based on dollar sales, in U.S. supermarkets.

Top 10 Craft Vendors Based on Dollar Sales
Total U.S. – Supermarkets

Total Craft Dollars = $600MIL, +15.3%

$$ SALES
SHARE
YTD
% CHG YA
YTD
+/- YA
BOSTON BEER CO (1)
$90,924,898
11.5%
15.1
-0.51
SIERRA NEVADA BREWING CO (2)
$59,756,761
8.2%
10.0
-0.65
CRAFT BREWERS ALLIANCE (3)
$47,586,486
11.6%
7.9
-0.26
NEW BELGIUM BREWING COMPANY (4)
$43,272,225
5.0%
7.2
-0.71
GAMBRINUS COMPANY (5)
$32,146,881
5.7%
5.4
-0.49
NORTH AMERICAN BREWERIES (6)
$22,002,817
-6.1%
3.7
-0.84
DESCHUTES BREWERY (7)
$21,101,325
9.4%
3.5
-0.19
THE LAGUNITAS BREWING COMPANY (8)
$17,580,254
77.3%
2.9
1.02
BELLS BREWERY INC (9)
$12,082,057
23.3%
2.0
0.13
STONE BREWING CO (10)
$11,373,335
28.0%
1.9
0.19
IRI Data : YTD 2013 Ending 07.14.13

Not surprisingly, the IPA category is driving a considerable amount of craft’s growth in the supermarket channel. IPA dollar sales of $128,005,155 are up 35.7 percent through July 14, and Wandel believes the category is likely to stave off a late fourth quarter push from the seasonal category. Dollars sales of seasonal beers trail IPA by nearly $35 million.

In his presentation, Wandel also highlighted a slew of package, vendor, brand and regional trends, which will be covered in more depth tomorrow.