Dissecting Data: Mexican Imports, Hard Seltzer Driving Overall Beer Category Growth

An important summer selling period is drawing near, and Brewbound has you covered with some of the most recent category data from market research firms such as Nielsen and IRI, as well as industry trade groups the Beer Institute (BI) and National Beer Wholesalers Association (NBWA).

Year-to-date through May 19, off-premise volume sales of beer at multi-outlet and convenience stores were up 0.5 percent, while dollar sales were up 2.8 percent, according to IRI. Volume sales of craft beer were up 1.9 percent during the period, while dollar sales were up 3.1 percent, the firm reported.

Among craft beer styles, both volume and dollar sales of IPA — the segment’s largest style — were growing about 14 percent during the period, according to IRI. However, the next four largest craft beer SKUs by volume — Belgian witbiers, seasonal offerings, pale ales, and variety packs — were all in decline. Volume sales of seasonal products dipped the most, at 15.6 percent.

Meanwhile, sales of the five largest IRI-defined craft brands — Blue Moon Belgian White, Sierra Nevada Pale Ale, Shiner Bock, Lagunitas IPA, and Shock Top Belgian White — were all in decline, according to IRI. In fact, only two of the top 10 craft brands — Founders All Day IPA (+16.3 percent) and Elysian Space Dust IPA (+30.6) — increased volume sales through May 19.

The fastest-growing segment in the beer category, however, belongs to flavored malt beverages. Volume sales of FMBs, driven primarily by the growth of hard seltzers, were up 23.3. percent.

Leading the way is Mark Anthony Brands’ White Claw variety pack, volume sales of which were up 320 percent through May 19, according to IRI. Volume sales of White Claw Black Cherry were also up 308 percent during the period, while volume sales of Boston Beer Company’s Truly Hard Seltzer berry mixed pack were up a whopping 604 percent year-to-date through mid-May.

According to Nielsen, off-premise sales across the hard seltzer segment were up 193 percent through April 20, and it’s one of the categories the firm highlighted in a recent roundup of summer trends.

Other alcohol beverage categories the firm is watching include hard kombucha — sales of which increased 247 percent through April 20 — and spirits-based cocktails.

“In the months ahead, retailers would be wise to prioritize promotion strategies beyond traditional staples,” the firm wrote.

Outside of alcohol, Nielsen also reported that 41 percent of beer drinkers are interested in cannabis, an industry former Anheuser-Busch chairman August Busch III is fearful of taking share from the beer industry. At the Beer Institute meeting in St. Louis this week, Busch said the increased use of legal cannabis is a threat to the entire alcohol industry.

“It will reduce the consumption of alcohol, the more marijuana is in the marketplace,” he said.

If alcohol consumption is suffering as a result of increased marijuana use, broader Nielsen trends aren’t showing it. The firm reported that total off-premise sales of beer, FMB and cider were up 1.3 percent during the 52-week period ending April 20. However, a closer look at the data reveals that sales of domestic premium and light beers — the category’s largest segments — were down 4.7 and 4.6 percent, respectively, over that timeframe. Sales of craft beer were also down 0.9 percent, according to the firm.

Nevertheless, 66 percent of legal drinking age consumers between the ages of 21 and 34 are making efforts to reduce their overall consumption, according to Nielsen. Another survey conducted by the firm last fall found that 25 percent of 21- to 24-year-olds went three months without going out for a drinking occasion.

Consumers who are still drinking beer are opting for Mexican imports, which accounted for 37 of the category’s dollar growth during the 52-week period ending April 20.

Indeed, Mexican beer imports were up 3 percent through April, to about 8.4 million barrels, according to the Beer Institute.

Overall, imported beer volume increased by 8.8 percent in April, and imports were up 1.8 percent year-to-date, outpacing domestic beer shipment volume, which decreased by 0.4 percent during the same period.

Meanwhile, as Brewbound previously reported, the NBWA’s Beer Purchasers’ Index (BPI) — which helps explain U.S. beer distributors’ monthly buying behavior — expanded in May, marking the fifth straight month that orders outpaced 2018 levels.

May 2019’s index of 61.9 was the highest of the last three years, due in part to the expansion of the FMB/PAB segment with a record reading of 78.8. Other segments that expanded in May included imports (58.7 index) and craft (54.8).