The once-booming flavored malt beverage (FMB) segment is “showing some concerning declarations over recent weeks,” Bump Williams Consulting (BWC) founder Bump Williams noted in a recent report.
FMB volume gains dropped by half – from +2.2%, to +1.1% – from the four-week period to the one-week period ending May 18, according to NIQ retail measurement data cited by BWC. The segment recorded +11% and +8.2% volume growth in the latest 52 weeks (L52W) and 26 weeks (L26W) through May 18, respectively, and is showing signs of “saturation,” according to BWC.
“Big 2023 launches are unable to cycle and the influx of new hasn’t been enough to more than make up for declines among the established players, at least not yet anyway,” Williams noted of the segment.
Elsewhere in the beer category’s high end, imports recorded a -1.8% volume decline in the week ending May 18, but posted steady growth in all other tracked periods – “a beacon of consistent volume (and dollar) growth for the category,” according to BWC.
“There is no need to ring the alarm as long as Constellation, Diageo, Heineken, Sapporo and Radeberger are bringing healthy brands from across the globe to the U.S. market, but that little flash of red in the latest one week does make me curious if that is a sign of things to come or simply just a one-week outlier due to some [year ago] activity that wasn’t duplicated in 2024,” Williams wrote.
Craft’s volume declined -6.5% in the week ending May 18. Despite showing signs of improvement from its -6.7% compound annual growth rate (CAGR) from 2020-2023, the segment’s volume showed signs of improvement in the past year (-3% in the L52W, -3.3% in the L26W, -3.2% year-to-date (YTD) through May 18, -3.7% in the L13W and -5.1% in the L4W). It is now “regressing,” according to Williams.
“Collectively this may not be as optimistic a picture you hope to see from some of the leading high-end segments heading into the summer, but there is still a lot of green that can be built off of as well,” Williams wrote.
The premium segment “continues to suffer shockingly consistent volume declines” and accounts for 75-80% of the category’s overall volume declines, Williams wrote. Those declines have accelerated beyond the segment’s -7.5% three-year CAGR, driven by Anheuser-Busch InBev-owned (A-B) Bud Light’s catastrophic drop in sales stemming from a conservative-led boycott that began in April 2023. Premium volume declined -8% in the L52W, -8.9% in the L26W, -9% YTD, -8.7% in the L13W, -8.5% in the L4W and -9.3% in the L1W.
“Even with the big wins that took place for some brands over the last year or so, the net outcome was not a positive one for premium beer as a whole, and this remains a drag on the overall beer category when it comes to collective performance,” Williams wrote.
The super premium segment, largely driven by leader A-B’s Michelob Ultra, appears to be in “recovery,” according to BWC. Volume sales of the segment increased +2.8% in the L4W and +0.9% in the L1W, up from declines of -2.6% in its three-year CAGR, -5.1% in the L52W, -3.3% in the L26W, -3.2% YTD and -1.7% in the L13W.
Super premium’s performance “paints an even more optimistic picture behind some moderate volume growth over recent weeks” and is “a reminder that premiumization is still present in beer,” Williams wrote.
Below premium volume has shown “steady improvements,” with -1% in the L4W and -2% in the L1W, a marked increase from the segment’s -7.4% three-year CAGR.
“A lot of this can be credited to the return to form from [A-B’s] Busch Light, but other key brands such as Pabst Blue Ribbon, [Molson Coors’ Miller] High Life and Keystone Light have found a receptive audience, perhaps offering some relief to those more price-sensitive beer drinkers in the wake of some all-time high CPI [Consumer Price Index] numbers for beer at home,” Williams wrote.
At a macro level, beer category volume has been “steady,” with a decline of -4.9% in the L1W, compared to its -4.5% three-year CAGR. Volume data for all measured periods in the past year has hovered between -3.1% and -3.7%.
The beer category’s -4.5% CAGR represents a slight hangover from the unusual off-premise boom during 2020 when the COVID-19 pandemic forced the closure of bars and restaurants.
“This sharp drop was slightly exaggerated given the bit of course-correction we saw in 2021 coming off of an inflated 2020, and if we were to only look at the two-year CAGR from CY [current year] 2021 through CY 2023, the volume sales decline would be ‘only’ -3.4%, which is much more in line with the ongoing trends we have observed throughout the latest 52 weeks (also -3.4%),” Williams wrote. “Point being, the beer category has seen a steady diet of volume decline since 2020 and has shown no signs of any real recovery with the latest one week in particular looking quite damning (-5%).”
Wine category volume has been similar to beer, with a steep decline in its three-year CAGR (-6.6%), but declines between -3.4% and -2.8% for all measured periods in the past year, according to BWC.
Unlike beer and wine, all spirits category volume data has been in the black, with growth of +2.2% in the three-year CAGR. Spirits volume increased +5.2% in the L52W, but has been “slowing” since – +3.1% in the L26W, +3.5% YTD, +2.5% in the L13W, +2.1% in the L4W and +1.3% in the L1W.
“Of the ‘Big 3,’ spirits has been the only category to experience any volume sales growth over this recent stretch, maintaining an impressive level of consistency from CY 2020-2023 and currently through 2024,” Williams wrote. “That being said, a lot of this growth for spirits can be attributed to the rapid acceleration of the prepared cocktail/ready-to-drink [RTD] landscape which has been pumping ‘beer-like’ volume into the category.
“Because the overall growth rates were so heavily tied to this emerging market, the recent decelerations taking place among this collective RTD landscape are starting to paint a picture of diminishing returns on spirits volume overall,” he continued. “Now, RTDs are not the only growing source within the spirits world, so I would expect there to be some consistency in the trends through the short-term, but this will be something to monitor as saturation rears its head within the ready-to-drink landscape.”
Spirits-based RTDs have recorded “notable deceleration” in recent measured periods. The segment’s volume grew +73.7% between 2020 and 2023, which dropped to +35.8% in the L52W, +26.8% in the L26W, +23.7% YTD, +18.7% in the L13W, +15.9% in the L4W and +14.2% in the L1W, according to BWC.
“While still a standout in the spirits landscape, it is pretty clear that the magnitude of growth continues to slow as the category swells,” Williams wrote. “Though we don’t expect there to be an immediate halt in the coming weeks, this could perhaps be the last year we see those double-digit numbers for the RTD spirits landscape as a whole as it shifts from growth to maturity and the shelves become more of an individual battleground.”