IRI: Craft Beer Sales Up 23 Percent Through August 10

As the Brewers Association gears up for its annual mid-year “Power Hour” category sales review with IRI tomorrow, Brewbound decided to examine craft’s performance through the first 220 days of 2014.

While Dan Wandel, principal of Beverage Alcohol Clients Insights for IRI, will certainly be armed with more detailed regional data during Thursday’s call, here’s what we know already:

Year-to-date craft dollar sales in IRI’s multi-outlet and convenience retail channel universe (MULC), which comprises grocery, drug, Wal-Mart, Club, Dollar, Mass-Merchandiser and Military stores, were up 22.9 percent to $1.3 billion through Aug. 10. Volume sales are also growing steadily, up 19.3 percent in MULC during the same period.

Craft’s continued growth comes at a time when domestic premium sales remain flat, with dollar sales up just 0.2 percent in MULC through Aug. 10.

So which craft beer companies are benefiting the most from the sustained growth?

Boston Beer Co. sales are up more than 34 percent through the first 220 days, and the company’s Samuel Adams seasonal and Boston Lager SKUs continue to lead the category — dollar sales are up 20.7 and 6.4 percent respectively.

Narrowly edging out both of those SKUs, however, was the category’s best-selling brand, Sierra Nevada Pale Ale, dollar sales for which were up 6.1 percent. Company-wide dollar sales were also up 12.3 percent in MULC.

Some of that growth was driven by Sierra Nevada’s Beer Camp Across America tour, which helped the brewer earn additional retail placements and floor displays at craft-savvy chains like Whole Foods and BevMo.

“All of the chains were really excited about it,” said Joe Whitney, Sierra’s director of sales and marketing. “Pale Ale and Torpedo picked up a bit. It was nice.”

A few other notable craft brewers also saw double-digit gains through Aug. 10 including, New Belgium Brewing, Lagunitas Brewing Company and Bell’s Brewery.

Dollar sales for New Belgium and Lagunitas are up 40.5 percent and 69 percent, respectively. Bell’s sales are also up double-digits — year-to-date company-wide MULC dollar sales are up more than 40 percent.

“It is a historical thing that is happening here,” said Lagunitas founder Tony Magee. “There are so many consumers coming to craft now and it is at one of those tipping points.”

In craft styles, India Pale Ale’s continued their dominance over the category with MULC dollar sales growing more than 50 percent, to $304 million, year-to-date. By this time next month, 2014 sales of IPA will likely surpass last year’s total, which checked in at $349 million.

Kate Baker, the co-founder of the Craft Beer Cellar chain of retail franchises, believes much of that growth is being fueled by the increasing popularity of lower alcohol IPAs.

“The influx and absolute craze over Session IPAs has got to have highly contributed to those numbers,” she said.

Baker also credited brewer creativity.

“There are a lot of new hop varieties out there that are bursting with flavor and character,” she said. “I think a lot of that growth has to do with the ingenuity surrounding some of the new IPAs. Brewers are coming up with new hop combinations to make stuff really pop.”

Within the IPA category, Sierra Nevada continues to lead the pack with Torpedo, dollar sales for which are up 14 percent to more than $29 million. But Lagunitas, with its IPA offering, is beginning to close the gap — dollar sales are up more than 74 percent to $26.5 million.

Magee credited the internal development of customer relationship management (CRM) software for much of his IPA brand’s growth.

“We’ve developed some really good tools for our salespeople in the trade so they know what they’re doing when they get up in the morning,” he said. “Those tools are powerful things and really help deliver results for distributors.”

He also pointed to an those new craft consumers and better retail execution as reasons why Lagunitas IPA continues to grow double-digits.

“Consumers have finally said ‘I am in,’” he said. “Our distribution has grown 14 percent but it’s not all new distribution that is yielding this. Our rate of sale has been improving. It’s a perfect storm.”

Not far behind Lagunitas are Boston Beer’s Rebel IPA and New Belgium’s Ranger IPA. Sales of Rebel IPA, which rolled out nationwide in January, are approaching $20 million. Sales of Ranger IPA, meanwhile, are up more than 35 percent to $18 million.

IPAs aren’t the only craft category growing, either. Sales of seasonal offerings and variety packs are also up 19.1 percent and 24.5 percent, respectively. Nevertheless, sales of those two packages for the industry’s top players — Boston Beer and Sierra Nevada — haven’t quite taken off. Dollar sales for the Samuel Adams variety pack are down 7.9 percent while sales of Sierra’s seasonal SKU are down 3.1 percent.

Additional highlights:

  • Dollar sales for Mexican imports are up 14.9 percent, to $1.8 billion. Corona Extra continues to pace that category, with dollar sales up 8.7 percent, to more than $819 million.
  • Dollar sales (in MULC) for craft saison and farmhouse ales continue to climb, up 92 percent to $2.1 million, through Aug. 10.
  • The cider category continues to grow at a huge double-digit clip — dollar sales are up 86 percent to more than $202 million.
  • Sales of Boston Beer’s Angry Orchard Crisp Apple cider are up 115 percent (in MULC), to nearly $80 million.
  • Canned 12-packs of Sierra Nevada Pale Ale are the best selling aluminum craft package — dollar sales are up 17.6 percent.
  • Sales of New Belgium’s Rampant Imperial IPA, in six-packs, are up 151 percent to $5.2 million.
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