Craft Beer, Imports Drive Beer Category Growth in 2016

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The Beer Institute has estimated that category-wide beer volumes grew 0.3 percent last year, thanks in part to increasing sales of craft and imported beer.

In a note to members, sent yesterday, Beer Institute CEO Jim McGreevy said sales of imported beer, particularly brands from Mexico, propelled the category to a positive performance in 2016.

Import volumes increased 6.8 percent, or 2.1 million barrels, versus 2015, he said.

That’s in keeping with the long-term trend: Import volumes have grown steadily since 1992, when those brands accounted for just four percent (8.3 million barrels) of all beer sold in the U.S. In 2015, import volumes grew 6.2 percent, to 31.2 million barrels, according to Beer Institute statistics.

Production of domestically brewed beer, meanwhile, declined 0.8 percent, or 1.4 million barrels, last year. 2016 marked the fourth straight year that domestic beer volumes declined, and the seventh time in the last eight years that domestic brewers failed to help the category grow, according to the BI.

Despite the downward production trends for brews made stateside, beer produced by more than 5,000 U.S. craft breweries increased seven percent, which McGreevy noted was a “deceleration in that segment’s growth compared to recent years.”

Indeed, production from craft breweries grew about 13 percent in 2015 and 18 percent in 2014, according to industry trade group the Brewers Association, which represents the interest of small and independent craft breweries.

That group, however, also estimated midway through last year that craft beer volume growth would continue to decelerate as the segment matured.

“As craft’s base gets larger, as with any industry, it becomes more difficult for it to grow at the same percentage rate,” BA chief economist Bart Watson said last July.

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In his note to BI members (Anheuser-Busch InBev, MillerCoors, Constellation Brands and Heineken USA are the four largest, among others), McGreevy also noted that beer sales at off-premise retail outlets continued to grow while traditional on-premise operators lost sales to brewpubs and taprooms, where volume sales increased an astounding 60 percent.

But even as total beer volumes grew slightly, the category itself still ceded share within the total beverage alcohol segment, McGreevy said.

“The wine and liquor categories each outpaced beer last year, growing volume by an estimated 2.0 percent and 2.4 percent respectively,” he wrote. “As a result, beer lost an estimated 0.5 percentage points of share within beverage alcohol volume, which was two-thirds the amount of share that beer lost to wine and hard liquor in 2015.”

That, he added, means beer companies have “more work to do,” in 2017 in order for the category to continue growing.

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