Brewers Association: Craft Export Growth Slows to Single-Digits in 2017

For the second consecutive year, U.S. craft beer exports grew in the low-single digits. However, growth of international shipments has slowed considerably as the export market has matured and competition from brewers in those foreign markets has increased.

The Brewers Association (BA) — a nonprofit trade organization representing small and independent domestic craft brewers — announced Tuesday that U.S. craft beer exports grew 3.6 percent, to 482,309 barrels, in 2017. The organization valued those products sold abroad at $125.4 million.

Those numbers represent another “all-time high” for U.S. craft beer exports, according to the BA. But growth has slowed in each of the last three years. In 2016, craft export volumes grew by 4.4 percent. In 2015, exports were up by 16 percent. And in 2014, international shipments were up 35.7 percent.

Speaking with Brewbound, BA export development program manager Steve Parr attributed the slower growth to the maturation of the organization’s Export Development Program, which is now in its 14th year, as well as increased competition from breweries in those international markets.

“We’re seeing the craft markets start to thrive in some of those markets where previously American craft beer was really the leading lights,” he said.

The BA estimated that more than 100 of its members, including many large regional breweries, shipped beer out of the country as part of its Export Development Program. The BA initiated that program in 2004 in order to help craft breweries gain international exposure via “trade shows, festivals, seminars, media outreach and competitions.”

For U.S. brewers, Canada remains the top international market due to the ease of shipping product across the border. In 2017, Canada accounted for more than half of all exports (51.3 percent). However, that number was down 3.5 percent from previous year.

Parr attributed the decline to increased competition from Canadian breweries as well as pressure from multi-national brewers. Another headwind facing U.S. brewers, he said, is the effect of a stronger dollar on pricing.

“When the dollar gets strong, we’re seeing the price of American craft beer in those markets become less competitive,” he said. “So when someone is having to choose between a local beer and something that’s more expensive from afar, there’s certainly a premium that they’re paying for that international product, which in our case, is an American craft beer.”

Nevertheless, the United Kingdom was the second largest import market for U.S. brewers (10.5 percent), followed by Sweden (6.7 percent), Korea (4.6 percent), Australia (3.8 percent), Japan (2.7 percent) and China (2.5 percent).

Parr called Korea “one of the fastest growing markets” for U.S. exports. Last year, he said exports increased 200 percent over 2016. He added that the BA will try to maintain that momentum by having about 20 of its members available to meet importers and participate in food-and-beer-pairing events at the Seoul International Wine and Spirits Expo.

Growth in Japan also slowed to 2.6 percent in 2017. The prior year, exports to Japan grew 22.6 percent.

“The overall Japan beer market is declining, kind of like what we’re seeing here in the United States,” Parr said. “But there was an increase in the number of breweries that were sending their beer to Japan. It’s just that the total volumes that were being added weren’t quite as much as an exponential rate that had been happening in previous years.”

Growth was also slower in the Asia-Pacific region (excluding Japan), where U.S. exports grew 7.4 percent. In 2016, exports to that region grew 12.9 percent.

Meanwhile, exports were up 1.3 percent in Western Europe (France, Spain, Italy), versus 0.4 percent in 2016. Those numbers are down from 2015, when U.S. breweries saw 33 percent growth in those markets.

In order to help facilitate continued export growth for its members, Parr said the BA will be entering beer from about 30 U.S. breweries in the Australian International Beer Awards, maintaining a presence at the Cerveza Mexico trade show and beer festival and sending beer to the Vancouver Craft Beer Week festival, the Great British Beer Festival, the Stockholm Beer and Whisky Festival and the European Beer Star competition.

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