Craft beer sales are quickly approaching $1 billion in U.S. supermarkets and the U.S. brewery count is climbing towards 2,000. It’s no secret that 2011 was a phenomenal growth year for the craft beer industry, and now we have some year-end Symphony IRI data to back it up.
The Brewers Association reported in January that 260 new breweries came online in 2011; nearly every brewery we’ve spoken with is reporting significant volume growth.
Speaking at the “Power Hour” hosted by the Brewers Association, IRI’s Senior VP of Beer, Wine and Spirits, Dan Wandel, discussed craft beers performance especially in U.S. Supermarkets.
Here are the most important takeaways:
Craft’s dollar share in U.S. Supermarkets was up 15 percent over last year to 10.8 share, the sixth consecutive year of growth. That’s double the share it held in 2006. These numbers prove why craft beer is the number one growing beverage-alcohol segment in U.S. Supermarkets
So what products are responsible for the growth? Wandel pointed to several areas. Variety and seasonal packages, IPA’s, large-format bottle offerings, the rise of canned beer and even private label brands (see below) are the major catalysts.
Boston Beer Co. continued to lead the way as the top craft vendor, generating $173 million in sales. Sierra Nevada and Craft Brew Alliance followed with $92.1 and $77.4 respectively.
But despite impressive dollar sales growth, seven of the top ten vendors actually lost a combined 4 share points of total segment dollars, no doubt because of the numerous emerging breweries earning more space on supermarket shelves. Only Bells Brewery and Stone Brewing Co. were able to gain a collective 0.2 percent dollar share.
Styles Driving Growth:
Kona Brewing cracked the top 15 new beer brands (dollar sales) with its variety pack, raking in more than $2 million in dollar sales. The only other craft brewer to make that list was Sierra Nevada with its ‘Beer Camp’ beers.
Driving much of the growth were seasonal offerings, with three brands landing in the top 10. Samuel Adams seasonals, while still the category leader, actually dipped in dollar sales by 0.4 percent. Sierra Nevada and New Belgium on the other hand gained 0.9 percent and 12.1 percent respectively.
But the biggest brand winner was Sierra Nevada’s Torpedo Extra IPA, up 63 percent over last year. The biggest loser was Samuel Adams Light, down 14.9 percent since 2010.
Large Format Bottles Earning More Shelf Space:
Most craft brewers will tell you they make the most margin on ‘bomber’ offerings and it looks like they are right. The 22 oz. bottle single-serve format generated over $44 million in sales at U.S. Supermarkets, up 35.5 percent from 2010. But the 6-pack was still the top dog, up 12.2 percent over last year and accounting for $469.1 million in sales.
Yes They Can:
Of course, the hottest trend in craft brewing last year was cans. Craft cans generated $11.5 million in sales at U.S. supermarkets, up 97 percent from 2010. It’s hard to believe that in 2008, craft can sales totaled just 40,000 cases. Compare that to the 358,000 cases in 2011.
It’s also worth mentioning the craft-friendly 16 oz. 4-packs were up over 750 percent in U.S. supermarkets, accounting for $752,980 in sales.
IPA Leading the Way:
Sure, seasonals usually get the credit as the “biggest brand,” but those include multiple styles. The best-selling style in U.S. supermarkets is the IPA. There were 319 IPA brands selling in U.S. supermarkets in 2011. That’s up from 264 in 2010. Individually, there were 25 brands that generated $1 million in sales each. The category leader was Torpedo with $16.8 million in sales. Also in the top 5 were Redhook Long Hammer IPA, New Belgium Ranger IPA, Lagunitas IPA and Stone IPA.
And how about those private label brands? Those sales were up 44 percent across the food, drug and convenience channels with sales eclipsing the $35 million mark. Private label craft was up 35 percent overall and two brands made their way into the top five new craft beer brands. Double Take IPA and Double Take Amber Ale accounted for over $2 million in dollar sales at U.S. supermarkets. 14 new private label brands entered the beer space, 7 of which were craft.
So what’s in store for 2012? Wandel said he is ‘feeling really bullish’ about craft.
He is confident that it will be able to achieve a 12 share of total beer dollar sales in U.S. supermarkets. He also said there is some ‘significant opportunity’ in the drug channel this year.
In 2011, craft generated almost 1.5 million case sales in the channel and Wandel expects that to rise. He could be on to something too. Through the first 7 weeks of the year, craft is up over 20 percent in the Drug channel and 25 percent in the convenience channel. Craft has also moved over 4 million cases in the food channel, 10 percent more than last year.