Brewers Association: Mid-Year Craft Volume Growth ‘Steady’ at 4 Percent

Halfway through 2019, volume growth for small and independent U.S. craft brewers has remained steady at 4 percent, according to data released today by national trade group the Brewers Association (BA).

BA chief economist Bart Watson, in a press release, characterized craft brewers’ low- to mid-single-digit craft brewer volume growth as “a similar pattern” to recent years.

“The majority of growth continues to come from microbreweries, taprooms, and brewpubs, whereas the distribution landscape remains more challenging for regional craft brewers,” he said.

Although demand for independent craft beer “continues to increase,” Watson added, that demand is “at levels that make it difficult for all breweries to grow simultaneously.”

“This is a sign of a maturing market that will likely continue in the coming years,” he added.

At the midway point of 2018, the BA reported craft volume growth of 5 percent. That number eventually settled at 4 percent growth — about 1 million barrels — for full-year 2018.

In sharing its annual mid-year growth figures, the not-for-profit trade group also announced that there were 7,480 craft breweries in operation through June 30, up from 6,464 breweries at the same time last year.

Recall that the BA reported that 7,346 breweries (2,594 brewpubs, 4,521 microbreweries and 231 regional beer companies) were in operation at the end of 2018. Those companies combined produced 25.9 million barrels of beer, up about 800,000 barrels from 2017.

Watson broke down the data even further in a blog post on the organization’s website. His data dive found that regional craft breweries (those making more than 15,000 barrels annually) are on pace to post “a slight decline in production” by the end of the year. In fact, Watson said growth rates for regional craft breweries average about one point lower than they did in 2018.

“There is still plenty of variation, though, as well as brewers who are growing faster than they did in 2018,” he wrote. “However, those growth stories are offset by brewers losing volume faster or seeing growth turn into declines.”

The mid-year data was better for microbreweries (those making fewer than 15,000 barrels) and brewpubs, which are growing at a slightly faster rate than last year, Watson wrote. He noted that excluding new beer companies and breweries making fewer than 1,000 barrels, microbreweries and brewpubs are are growing 2.5 points faster than in 2018.

Still, Watson wrote that “a slightly lower percentage” of microbreweries and brewpubs are growing than compared to full-year 2018. Nevertheless, he said the “vast majority” of microbreweries are growing, “and many at rates stronger than” in 2018.

Watson summed up the data saying that 2019’s growth rate looks a lot like 2018, “but with growth increasingly tilted toward the tail, even beyond 2018.”

Finally, Watson shared that he expects at-the-brewery sales to grow about 13 percent (about 400,000 barrels), to as much as 3.5 million barrels, in 2019.

So what’s driving craft’s volume growth? In mid-July, Watson parsed scan data from market research firm IRI and found that BA-defined craft volume was up 1.8 percent and outperforming the overall craft (+1.3 percent) and total beer (+0.3 percent) through June 30.

In that column, he wrote noted that craft wouldn’t be growing without new brands, which accounted for 4.5 percent of 2019 volume.

“Without their contributions, craft would be down 2.8 percent (or .5 percent if you just look at the existing brands),” he wrote.

A press release announcing the mid-year data is included on the next page.

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