IRI Power Hour: Craft Gains Shares Across Channels

In this afternoon’s IRI Power Hour conference hosted by the Brewers Assocation, Dan Wandel, principal of Beverage Alcohol Clients Insights for IRI, highlighted an “abundance of positive indicators” that surging growth of craft beer is set to continue through 2014 and beyond.

Wandel dissected data using sales information that for IRI, a Chicago-based market research firm, includes brands that fall outside the guidelines for “craft beer” as defined by the Brewers Association, including Goose Island, Red Hook, Widmer Brothers and Magic Hat. Based on the data, craft beer was the top alcoholic beverage segment in multi-outlet channels (not including convenience stores), growing by 17.4 percent over 2012 and exceeding $213 million in sales.

Additionally, Wandel said that craft “blew right past” expectations of reaching a 13 share in multi-outlet and convenience retailers by the end of 2013. Craft finished the year with a 13.4 share of all beer sales in those channels.

In supermarkets, where craft has enjoyed surprising growth, Wandel said that “it’s not inconceivable to see this segment achieve a 15 share by 2015.”

Beyond that major benchmark, Wandel said,it was also a big year for innovation in the industry, as 12 breweries earned more than $1 million in new product sales. (Five of those breweries fit with the BA’s definition of craft, it should be noted).

Though innovation may have been big in 2013, for six of the past eight years, an IPA has been the top new craft brand in a given year. So the reign of hops carries on.

One concerning fact, Wandel said, is that the segment is losing “a big chunk” of buyers to other categories — namely whiskey and wine — but is suffering no net loss thanks to the stream of new drinkers.

The year as a whole was strong, but the biggest week came in July, specifically, around the holiday.

“The 4th of July is becoming more and more important to the craft beer segment,” said Wandel.

While the holiday week may have been the biggest occasion to drink craft beer, the category is starting to make serious inroads into the last quarter of the year.

In supermarkets, the craft segment had a 15.5 share in 2013 during the “OND season” (October, November, December), up from 14 the year prior.

“We know that the craft season’s biggest selling season also happens to be OND,” said Wandel. “Over the course of 2009 to 2013 [in OND] on average we saw the craft segment had increased seven share points in its top 35 food markets.”

Of those markets, Seattle and Tacoma, Wash., Baltimore, Md., Washington D.C., San Diego, Calif., Cleveland and Columbus, Ohio, and Grand Rapids, Mich. all grew share points by more than 10 in 2013.

Additionally, the mature markets of Seattle, Tacoma, Cleveland, Portland, Ore., and San Francisco and Oakland, Calif. reached more than a 30 share.

Wandel went on to say that the increased prominence of cans in craft is playing a “bigger and bigger role” in the success of the segment.

“It’s really giving craft an opportunity to garner more share of consumption occasions that it really had to secede in the past,” he said. “It’s really enabled the category to go after different drinking occasions they normally could not go after in the past.”

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