Retailers are “paying increasingly more attention” to the sales rates/velocity of beer brands and it has resulted in the contraction of the amount of brands on shelves, as well as the amount of new brands entering the marketplace, according to Bump Williams’ monthly report for Bump Williams Consulting (BWC).
In 2022, there were an estimated 27,411 beer brands for sale at NIQ-tracked off-premise retailers, an increase of +4.4% versus 2021, Williams reported. That number dropped -2.8% in 2023, to 26,654 and continues to decline in 2024, with tracked brands down -6% year-to-date (YTD), to 22,597.
“While things could certainly even out as we get further into the year, these early reads suggest that there are fewer brands even making it to the shelves than perhaps we have become accustomed to,” Williams wrote.
The “biggest culprit” in brand declines is innovation, with the number of new beer brands declining -28.3% in 2023, to 2,950. Innovation also declined in 2022, but by a nominal -2.3%, to more than 4,000. This year is playing out similarly, with the number of new beer brands also down about -28% YTD.
“This dip is not only isolated to segments like craft or hard seltzer, where item churn has been a regular part of the business, but has become a common theme that we see across almost all segments to start the year,” Williams wrote.
“Perhaps some of these slowdowns are proactive in the pursuit of efficiency, or perhaps more reactive as a reflection of the space squeeze and elevated performance standards,” he continued. “But either way, when we see trends like this there are bound to be a mix of ‘winners’ and ‘losers’ when it comes to representation.”
Over the last 26 weeks, ending March 2, the average number of beer items per NIQ-tracked off-premise outlet has remained steady at around 226.4 (-0.8% in the period), which is a signal that the category is “defending its shelf space in totality, but clearly undergoing some adjustments beneath the surface,” Williams wrote.
Those adjustments include increases in the average number of items for imports (+5.6%, to 41.8 items), flavored malt beverages (+13.2%, to 35.5 items) and non-alcoholic beer (+18.7%, to 10 items), and continued item declines for craft (-3.4%, to 60 items) and hard seltzer (-16.8%, to 18.2).
Retailers are making these shifts to “capitalize” on the momentum of trending segments, and to “maximize efficiency” for store shelves. The decisions seem to be working, with item efficiencies – measured by the dollars per item per store selling – improving across struggling segments, “emphasizing the potential benefits of prioritizing the RIGHT assortment over a DEEP assortment,” Williams wrote.
The segment efficiency of hard seltzer over the last 26 weeks has increased +8.5% year-over-year (YoY), to $453.10, with the segment above trending FMBs (-5.5%, to $349.60). Craft efficiency is nearly flat YoY (-0.2%), to $292.10, but has the second lowest dollars per item per store selling after NA beer (-9%, to $275.50).
Premium beer remains “the most efficient segment” on a per item basis, but declined -7.6%, to $922.70, in the last 26 weeks, “which justifies a continued look at the assortment to tighten up returns,” Williams wrote. However, he noted that “while adjustments to the set are important to fine tune efficiencies, ‘crazy talk’ of eliminating certain brands altogether are more likely to be detrimental than additive on the bottom line.”
Williams also analyzed brand family winners and losers by total distribution points (TDP). Constellation Brands’ Modelo was “far and away the clear TDP winner,” increasing TDP +161.2 points over the last 26 weeks. Williams credited those gains to Modelo Especial continuing to “fill gaps” in its footprint, Modelo Chelada expanding its presence, and incremental facings for Modelo Oro.
“We know that space alone is not a guarantee for success as the demand (and repeat) still has to be there, but for brands that are coming into 2024 with expectations on either maintaining a growth trajectory or reversing course on decline, concepts like simply being present and available on the shelf really can make a difference in a category that has been struggling to find collective growth,” Williams wrote. “Every facing matters!”
FMBs accounted for the majority of the top 15 brand families by TDP gains, making up more than half of the list, led by No. 2 Molson Coors’ Simply Spiked (+96.1 distribution points) and No. 3 Monster’s The Beast Unleashed (+83.9 points). Other FMBs on the list include:
- No. 5 Boston Beer’s Twisted Tea (+76 points);
- No. 6 Mark Anthony Brands’ Cayman Jack (+70.3);
- No. 11 Phusion Project’s Pirate Water (+31.2);
- No. 12 Anheuser-Busch InBev’s (A-B) Cantaritos (+26);
- No. 13 Boston Beer’s Hard MTN Dew (+21.7);
- And No. 14 Diageo’s Smirnoff, FMBs only (+20.7).
Meanwhile, hard seltzer expectedly took the largest hit in TDP, with nine out of the top 15 brand families by TDP losses, including:
- Smirnoff, hard seltzers only (-14.3 points);
- New Belgium’s Fruit Smash (-14.7);
- Molson Coors’ Topo Chico (-15.8);
- Mark Anthony Brands’ Mike’s, hard seltzer only (-21.8);
- A-B’s Michelob Ultra Organic Seltzer, hard seltzer only (-23.9);
- Molson Coors’ Vizzy (-27.4);
- Constellation’s Corona, hard seltzer only (-46.2);
- A-B’s Bud Light Seltzer hard seltzer only (-78.6);
- And Boston Beer’s Truly (-93.7).
Along with Bud Light hard seltzer, Bud-branded super premium and premium products also recorded significant losses in TDP (-41.9 and -85.3, respectively).
The losses from Bud brands and hard seltzer extensions, combined with the types of brands winning in TDP gains, suggest that retailers are prioritizing flavor, Williams reported.
“And this doesn’t even include the flurry of activity still taking place in the ready-to-drink spirits side of the world,” he added.
Flavor-driven brands are also dominating the ranks of top new beer brands by dollar sales. A-B’s Busch Light Peach was the No. 1 new brand in the last 26 weeks, followed closely behind by the Cantaritos variety pack.
Boston Beer had five of the top 25 new brands: No. 7 Hard MTN Dew Baja Blast variety pack; No. 8 Angry Orchard Crisp Imperial; No. 14 Twisted Tea Extreme Lemon; No. 15 Truly Hard Seltzer Citrus Squeeze; and No. 16 Twisted Tea Extreme Blue Razz.
Beyond Twisted Tea, four hard tea brands also made the list: No. 5 FIFCO’s Lipton Hard Iced Tea variety pack; No. 10 Molson Coors’ 2 Hoots Hard Iced Tea; No. 11 NOCA Boozy Lemon Tea variety pack; and No. 22 New Belgium Voodoo Ranger Hardcharged Iced Tea.
Additionally, five new craft beer brands made the top 25:
- No. 6 New Belgium’s Voodoo Ranger Tropic Force;
- No. 12 AB-owned Goose Island Bourbon County Bananas Foster;
- No. 18 Molson Coors’ Blue Moon Non-Alcoholic;
- No. 23 Sierra Nevada Juicy Little Thing IPA;
- No. 24 Goose Island and Eagle Rare Stout;
- And No. 25 Lagunitas Tiki Fusion Zombie IPA.
“April 1 brings more to the table than just a new quarter, this is also when the groundwork laid in the battle for depth, breadth, efficiency and space all starts to pay off,” Williams concluded.